HC Deb 24 February 1994 vol 238 cc451-546
Madam Speaker

I have selected the amendment standing in the name of the Prime Minister.


Mr. Michael Meacher (Oldham, West)

I beg to move, That this House condemns the rapid growth in expenditure by quangos and in the use of contractors to provide public services; notes that these organisations are not publicly accountable to elected representatives; is concerned that their proliferation has been accompanied by a loss in the quality of public services, by increased fraud and waste, and by falling standards in public life; and calls upon Her Majesty's Government to review the progression towards an unelected state. When the Government came to office one of the key elements in their programme was the winding down of the state. What was not made clear at the time was that the Government were just as committed as any other Government to control of the state, but they wanted the control to be vested in their own fiefdom and removed as far as possible from any democratic influences.

The result is that today patronage is playing a bigger underhand role in British society than at any time since the days of Lloyd George. The public, constitutional and democratic power structure based on elections and votes has been steadily whittled away and replaced by a private, unconstitutional and undemocratic power structure based on patronage and money.

The scale of this process has not been fully recognised. It goes a great deal wider than honours and quangos. Certainly the Tories have handed out gongs and chairmanships of quangos aplenty in exchange directly or indirectly for money. It is much less realised that the Tory Government's opening of lucrative new markets through market testing and privatisation of public services, and the award of major contracts abroad without tender to their corporate friends, is clearly associated with donations to the Tory party.

The general message is clear: the more one serves the Tory party's interests and preferably contributes to its coffers, the more likely one is to get an honour, a key position in the new magistracy and favourable access to contracts.

Mr. Richard Tracey (Surbiton)

Will the hon. Gentleman give way?

Mr. Meacher

I shall give way in a moment.

The more one gets an honour, power or contracts, the more likely one is to reward the hand that feeds one, and that is Tory patronage written today.

Mr. Tracey

I am grateful to the hon. Gentleman for giving way so early. At this early stage of his speech, it is important for him to say something about the situation in Monklands council, which has been extremely well researched by the media and where, clearly, there are serious examples of the sort of thing that he is seeking to criticise. Let us not have Labour Members standing on a pedestal, which should be giving way underneath them.

Mr. Meacher

Obviously the hon. Gentleman had a short ministerial career because he is not very good on interventions. The fact is that—

Mr. Tracey

Answer the question.

Mr. Meacher

I shall answer the question. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) has fully answered this point. He wrote to the Secretary of State for Scotland—I am glad to see the Secretary of State here—on 1 February. As the point has been predictably raised, I shall read what my right hon. and learned Friend said: As you will be aware allegations of impropriety of various kinds have been made against Monklands District Council by, among others, Conservative Members of Parliament. So far as I am aware none of these allegations have been substantiated by any appropriate authority. However, I was much concerned to read in the Scottish press that your Ministerial colleague, Allan Stewart, who is responsible for local government in Scotland, has made allegations of financial irregularity and political corruption. This creates an entirely new situation. Allegations made by a Minister of the Crown—especially a Minister responsible for local government—cannot remain uninvestigated. They must either be substantiated or withdrawn. That is the key point.

The Secretary of State for Scotland (Mr. Ian Lang)


Mr. Meacher

The right hon. Gentleman has had the letter. I am sure that he would also like me to read out the last paragraph: I therefore invite you"— that is, the Secretary of State— to exercise your powers under the Local Government (Scotland) Act 1973, section 211 to cause a local enquiry to be made into the matters raised by your colleague. I ask you either to take this action or to invite him to withdraw his allegation. If the right hon. Gentleman would like to tell us which he is doing, I shall be glad to give way.

Mr. Lang

The hon. Gentleman would have enlightened the House if he had read out my reply to the Leader of the Opposition in which I pointed out that my hon. Friend the Under-Secretary of State had made no allegations but merely repeated and reported allegations made by Labour party supporters in Scotland. I further invited the Leader of the Opposition to let us have the evidence accumulated by the Labour party in connection with its inquiry into possible misdemeanours in Monklands district council. I have asked twice for that information, and I am still waiting for a reply from the Leader of the Opposition.

Mr. Meacher

I am glad that the right hon. Gentleman is backing off from what the Under-Secretary said. My right hon. and learned Friend replied to that letter on 3 February, and said: Your colleague, Mr. Stewart, was happy to repeat allegations about 'jobs for the boys'. You must surely be aware that it is a statutory duty on all Scottish councils to ensure that all staff are appointed on merit. If there is a matter which requires public investigation, it is for the Secretary of State for Scotland to set up a public inquiry. Let us have no more cheap taunts. I will move on.

We know that honours and company political donations are connected. Only 5 per cent. of companies currently donate to the Tory party, and yet more than 50 per cent. of the honours awarded to industrialists since 1979 have gone to directors of firms which contribute to Tory funds. I am told by a statistician that there is less than one chance in a million that that is a coincidence.

The role which quangos now play in the patronage stakes is of increasing significance. Let me make it clear at the outset that there is nothing inherently wrong with quangos. There will always be a certain number of them, and quite rightly so. The continued existence of some of them is highly desirable in principle, particularly those such as the BBC, the Boundary Commission, the Local Government Commission and a string of others. Those quangos were set up to be independent from the Government and to exercise their best arm's-length judgment on highly sensitive or controversial matters. I hope that that is agreed on all sides.

There are three worrying things about quangos. First, they are unaccountable, even though they now exercise substantial powers. That is different from the situation in the past. Many of the old quangos in the 1970s were different. They were purely advisory bodies, and some were little more than talking shops. Where they had executive roles, local councillors were often on the board, or a reasonable spread of interests was represented.

Today, quangos are powerful vehicles of patronage, wielding far greater powers and spending far more public money than ever before. Quangos, and to some extent central Government, have taken control out of the hands of local government, urban development corporations, London Regional Transport, higher education, grant-maintained schools and further education. Indeed, quangos have removed any say that local government ever had in the running of the major services of health and training. Those two services spend £19.5 billion a year, which, I submit, is a huge transfer of power from elected authorities to the patronage state.

Mr. Rod Richards (Clwyd, North-West)

The hon. Gentleman quite rightly says that he is concerned about patronage. Will he therefore remind the House who was appointed chairman of Great Ormond street hospital in the last days of the Labour Government in 1979? Will he remind the House who that lady was?

Mr. Meacher

That is an absolutely extraordinary question. The Government appoint those who are chairs of public bodies or of non-departmental public bodies, as quangos are now known.

Mr. Richards


Mr. Meacher

I am sorry, but it is one dog, one bite. If the hon. Gentleman is stupid enough to ask such a silly question, he will get a straight answer. The Labour Government made the appointment, as anyone would expect.

The second disturbing thing about quangos—

Several hon.Members


Mr. Meacher

I am sorry, but if that is the standard of interruption which I am to get, I am not prepared to waste the time of the House with such trivialities.

The second disturbing thing about quangos is the enormous sums of taxpayers' money which they dispose of without any say-so of the taxpayer. They have already taken over from elected local authorities the spending of some £24 billion of public money, and it is estimated that, by 1996, they will dispose of £54 billion—roughly one-fifth of all public expenditure. I submit that for a party that prides itself on safeguarding the taxpayers' money to put sums of that magnitude into the hands of persons who are accountable to no one and nothing except the say-so of the Secretary of State is an act of stunning irresponsibility.

Mr. David Wilshire (Spelthorne)

The hon. Gentleman asserted that local government no longer has a say in the sort of services that he is talking about. Would he care to comment on the fact that in my area to the west of London several Conservative councils put on the agenda for their council meetings the closure of a hospital. They have a say. A Labour council funds a pressure group. Is not that also having a say?

Mr. Meacher

I am most grateful for that intervention. Perhaps I should allow more interventions like that because what the hon. Gentleman says absolutely makes my point. I believe that the Conservative flagship borough of Wandsworth has decided that health is not a matter which should be left to local quangos but ought to come back under local elected control. That is exactly our argument. If the hon. Gentleman really takes the view that he has just expressed, I hope that he will join us in the Lobby tonight.

Mr. David Jamieson (Plymouth, Devonport)

Does my hon. Friend share my anxiety and that of many people in the south-west about the running of the west country ambulance trust? It spends £24 million a year of taxpayers' money, yet I cannot obtain an answer from the Secretary of State for Health about the running of the trust. Instead, I am referred to the chairman of the trust. The trust is being run by a chief executive who treats it as his own business. His management style is such that if he had been in the Gestapo he would have been thrown out for unreasonableness.

Mr. Meacher

That is a point which the Chancellor of the Duchy of Lancaster may want to take up when he replies to the debate. In several parts of the country it is difficult to get an ambulance. The target in the citizens charter of 14 minutes for a call-out is not met in two thirds of cases. There is a real problem. I am sure that the Minister will want to respond to that point.

The third disturbing feature of quangos is their membership. Gone are the days when there was a reasonable balance of interest. Let me make it clear that no one on this side of the House will object to Tories or business men as long as there is reasonable balance.

Mr. David Nicholson (Taunton)

Will the hon. Gentleman give way?

Mr. Meacher

I want to make my point.

The choice today, which is Tory Ministers' choice, is heavily partisan. Do not take my word for it. I am sure that Conservative Members will not. In The Independent on Sunday of 28 March last year, under the headline "What Happened to Democracy", Baroness Denton, then a junior Minister at the Department of Trade and Industry who had made more than 2,000 appointments, said: I can't remember knowingly appointing a Labour supporter.

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

As Baroness Denton is not a Member of this House and cannot reply herself, I must give the proper reply. She wrote to the newspaper to explain that that comment was taken out of context. She explained that not only did she not know whether she was appointing Labour members, but she did not know whether she was appointing Conservative members. She did not look into the political backgrounds of people who were appointed. That is the proper position, and that, I hope, is the position that the hon. Gentleman supports.

Mr. Meacher

That is very interesting. The fact that it got the Minister to his feet shows how sensitive the matter is. We should like to know whether it is true that Conservative central office checks through the best information available about political affiliations and uses that information to make appointments. Is that true or is it not? [Interruption.] It is not a question of reading papers. Is it true or is it not?

Mr. Waldegrave

Conservative central office does not make appointments to state offices.

Mr. Meacher

I must say—



Mr. Meacher

Hold on a moment.

Mr. Waldegrave


Mr. Deputy Speaker (Mr. Michael Morris)

Order. Let me point out to all Front-Bench Members that when one Front-Bench Member is at the Dispatch Box the other Member must respect that.

Mr. Meacher

Thank you, Mr. Deputy Speaker. The sensitivity, or perhaps the naivete, of that response betrays the extreme concern of the Tory party about the way in which it operates. No one suggested that Conservative central office makes appointments directly. What we believe is that it very carefully obtains the fullest information available and that the information goes to Ministers and is used by them to ensure the situation that exists today, where the membership of quangos—call them what you will—is overwhelmingly Conservative. II is not an accident. It has been determined by careful research. Is that true or not?

Mr. Waldegrave

Is the hon. Gentleman putting the following proposition to the House, that Transport house and the Labour Whips' office take no interest in appointments?

Mr. Meacher

All parties in the past have been concerned that a reasonable share of their own supporters achieve these positions. What we see today is something on a completely different scale, the ruthless elimination of everyone who is not of a Conservative persuasion, and it is patently clear from the way that the right hon. Gentleman entirely avoided answering my question that the answer to it is yes.

Mr. Gary Streeter (Plymouth, Sutton)


Mr. Meacher

No, I will not give way again.

Mr. Jon Owen Jones (Cardiff, Central)

I thank my hon. Friend for giving way, although he may regret it because I want to step in to support the Government. We have an example in Wales which demonstrates that Ministers do not know the political affiliations of members. When the Secretary of State for Wales appointed David Rowe-Beddoe chairman of the Welsh Development Agency, one of the most important quangos in Wales, he told us that this appointee had no Conservative connection. We later found out that Mr. Rowe-Beddoe, quite rightly, had put on his CV that he had collected money for the Conservative party when he was in Monaco and was an important member of Conservatives Abroad. But Mr. Redwood told us that he had not read the CV. So there you are.

Mr. Deputy Speaker

Order. Let us have proper decorum in the House. I should be most grateful if hon. Members would remember, when talking about a Secretary of State, that it is "the hon. Member" or "the hon. Minister" or "the Secretary of State".

Mr. John Garrett (Norwich, South)

Oh, come on.

Mr. Deputy Speaker

I do not know who said "Oh, come on", but I should be grateful if he would desist in future. If it was the hon. Member for Norwich, South (Mr. Garrett), I hope that he will desist.

Mr. Garrett

I will certainly desist.

Mr. Deputy Speaker

I am most grateful.

Mr. Meacher

I am glad to see that even in this case, somehow or other, a Conservative Secretary of State managed to make the right decision, from his point of view, even though it was apparently for the wrong reasons or through lack of available evidence.

Mr. Streeter


Mr. Meacher

No, I will not give way.

What I want to tell the House now illustrates, in a way, the point that my hon. Friend the Member for Cardiff, Central (Mr. Jones) made. I have here a letter written to Mr. Ahmad in my constituency by the right hon. Member for Sutton Coldfield (Sir N. Fowler), chairman of the Conservative party, inviting him as a director of the Oldham training and enterprise council to make a contribution to Conservative party funds. I happen to know the gentleman very well. I mention this now, not because there is the slightest danger that he might contribute to Tory funds but simply to point to the assumption that if one is a member of a quango such as a TEC one is very likely to be a Conservative supporter.

Mr. Waldegrave


Mr. Meacher

I wonder who is making this speech, me or the right hon. Gentleman. It is his fourth intervention, I think.

Mr. Waldegrave

It may be of interest to the hon. Gentleman to know that my association sent a request for funds to my Liberal opponent at the last election, which shows that these requests are not always sent to supporters of our own party.

Mr. Meacher

We shall draw a veil over those comments.

Mr. Peter Kilfoyle (Liverpool, Walton)

Further to my hon. Friend's theory about the membership of quangos and letters soliciting funds for the Conservative party, does that explain the letter sent to the Labour leader of Liverpool city council from the same organisation? Am I correct in assuming that it is because he is a nominee to the Merseyside development corporation?

Mr. Meacher

I should think that that is extremely likely. Clearly, the Tory party is so bereft of funds and so reliant on the comprehensiveness of its appointments to quangos that Tory Members think that they can write to anyone and get some money.

Mr. Peter Bottomley (Eltham)

Will the hon. Gentleman give way?

Mr. Meacher

No, I shall not give way again.

The Economist got it right. It is not a flag waver for the left, but about a year ago, in an article nicely entitled, "Subsidiarity begins at home", it said: What powers Ministers have taken for themselves they are giving to their friends. Indeed they are. The choice is overwhelmingly Tory men who are in business. Quango board memberships read like a list of Tory nomenclature. For example, analysis of the membership of 372 health trusts, which includes the latest shadow fourth wave of trusts, shows that 61 per cent. of trust chairmen have a business or financial background—[Interruption.] Conservative Members seem to think that that is right and defensible. In addition, 8 per cent. are either solicitors or barristers, while less than 4 per cent. have a health background.

Nobody would deny that business men have a contribution to make to the running of social services, but to pack those bodies with three or more business men out of every five members, when only one in 25 has health expertise, is taking bias to the point of absurdity. The reasons for packing those quangos, which, judging by some of their members, should be called "egos"extra—governmental organizations—are all too clear.

Is it a coincidence that Sir Christopher Benson was appointed chairman of the Housing Corporation when he also chairs the Sun Alliance, which donated £50,000 to the Tory party in 1992? He is also associated with MEPC and the Costain Group, both of which also made substantial donations to the Tory party. Is it a coincidence that Mr. Neil Clarke was appointed chairman of British Coal, when he was formerly chief executive of Charter Consolidated, which gave £26,000 to the Tories? Is it a coincidence that Sir David Nickson was appointed chairman of Scottish Enterprise, when he is also a non-executive director of three companies that contribute to Tory party funds, including £70,000 from Scottish and Newcastle Breweries and £53,000 from Hambros? Is it a coincidence that Sir Nigel Mobbs was appointed chairman of the Department of Trade and Industry advisory panel on deregulation, when he is also chairman of Slough Estates, which gave £44,000 to the Tories, and also vice-chairman of Kingfisher, which donated £25,000?

I could go on and on. [HON. MEMBERS: "Well, go on then."] Conservative Members want to hear more. I am pleased to oblige. The chairmen of more than 20 public bodies have been appointed by Tory Ministers and are associated with companies that donate generously to Tory party funds. They include the takeover panel, the Welsh Development Agency, the Port of London Authority, the London Tourist Board, Highlands and Islands Enterprise, the Top Salaries Review Body, the Medical Research Council—[HON. MEMBERS: "Name the people involved."] I shall certainly name all those involved and am glad to do so. The Independent Television Commission is another such quango.

Those important public bodies are now so stuffed with Tory workers—that was a Freudian slip, as I meant to say Tory worthies, but they certainly work for Tories in view of the way in which they busily contribute to Tory party funds—that one genuinely wonders whether "quango" really stands for "quite assuredly now Government-orchestrated".

Mr. Graham Riddick (Colne Valley)

Monklands district council issues two types of job application forms: green application forms, which receive preference, are handed out to the relatives of local Labour councillors; and other application forms for everybody else. Will the hon. Gentleman join me now in condemning that practice?

Mr. Meacher

I am struck that Tory Members, who are desperately anxious to derail this debate, can find only a single issue to raise. I have already dealt with that perfectly adequately. The power lies with the Secretary of State to set up a public inquiry if he so wishes.

On the corporate dimension, large, extremely lucrative contracts are often awarded without tender to a small group of favoured companies on the inside track which usually contribute to Tory coffers. Everyone now knows about the notorious £234 million Pergau dam project. It was not just a "very bad buy", as the permanent secretary called it, as a sweetener for an arms deal. He was overruled by the Prime Minister and the Foreign Secretary, no less, because it offered a huge construction contract to Balfour Beatty and Cementation, which are also major contributors to Tory party funds.

Over the past 15 years, £250 million of taxpayers' money has been allocated to foreign aid projects which the National Audit Office assessed as unviable or poor value for money. The beneficiaries of those projects, all with substantial aid grants, have been firms known for their Tory party loyalties. The projects include a power station in Bangladesh built by GEC; another construction project in Malaysia built by Biwater; two power stations in the Sudan built by NEI; and two power stations in Burma built by John Brown Engineering. The point is that most of those companies have received £50 million or more from the aid and trade provision. That is taxpayers' money intended for the relief of world proverty, but the Government have diverted it so that the principal beneficiaries are their own corporate donors.

Mr. Waldegrave

Will the hon. Gentleman give way?

Mr. Meacher

I will give way when I have concluded this point.

There could not be a more blatant example of the manipulation of public money to procure private money and influence for themselves. We now know that what Lady Thatcher meant by "batting for Britain" was back to basics—the basics of the Tory party. She meant "back to my place where the Tory party funds are being stored".

Mr. Waldegrave

If I could show that trades unions gave money to the Labour party, would it mean that the appointments by the last Labour Government of trade unionists to boards were wrong?

Mr. Meacher

Of course it would not. No one is complaining that companies contribute to the Tory party. But when trade unionists contribute to the Labour party, they do so on the basis of having a political fund that has been voted for. When companies contribute to the Tory party, it is done without the assent of shareholders. There is no ballot and it is not a democratic process. That is an important difference.

There is another significant difference between the public policies of the Tories and their private dealings. In the public realm their line is compulsory competitive tendering, which is enforced to the limit; in the private world it is negotiations and secret deals. I have here a list of all the aid and trade provision awards that were made in 1992. There were 15 of them, but only one was made on a competitive basis. The right hon. Gentleman has a few questions to answer about this matter too. As he opens up large new markets for the private sector, through market testing and the privatisation of public services, perhaps he can now tell the House—if so, I shall be very glad to give way—why he would not even allow an in-house bid for the huge Inland Revenue information technology contract that he awarded to a foreign company. If he genuinely believes in openness and fairness as these very large markets open up, how can he justify not even allowing an in-house bid?

Mr. Waldegrave

The House has debated the "Competing for Quality" programme several times. It is perfectly clear that when it is right to take a strategic decision to contract out, it would be misleading to staff to waste their time with an internal bid. That is set out in the policy and in the White Paper.

Mr. Meacher

Those are weasel words from a characteristically more clear-minded man. It is perfectly clear that, in the case of a huge contract where special interests attach to the Tory party, all the philosophy about openness goes out of the window completely.

If the system of honours, Government placemen, patronage and favoured contracts in exchange, directly or indirectly, for money worked in the public interest, it would not be so objectionable, but it patently does not. First, the loss of public accountability is a fatal weakness. Instead of quangos having more rigorous procedures because of the lack of election, they have less. None of the members of these appointed bodies is liable to surcharge. Most of the bodies are not required to hold their meetings in public. Many, such as grant-maintained schools and training and enterprise councils, make their own arrangements for audit, which the Audit Commission recently condemned as counter to principles which normally apply to the expenditure of public sector funds, principles which should not be surrendered lightly. In addition, quangos are not subject to the jurisdiction of ombudsmen, and they are excessively secretive. That, of course, is only following the Government line as set out to the Scott inquiry just a week ago by a Treasury solicitor, who said: It is damaging to the public interest to have any decision-making process exposed.

Mr. Waldegrave

Will the hon. Gentleman give way?

Mr. Meacher

I am only too willing to give way, but I think that the right hon. Gentleman's behaviour is an abuse of the House. He must have been on his feet seven times in the course of my speech, and he is about to make his own contribution.

The line taken in the words I have just quoted was repeated and endorsed as a philosophy of the Government a few days later by the Secretary of State for Defence. This suggests that "quango" might translate as "questions addressed with no Government openness".

Secondly, a system of Government private appointments and contracting out has not produced greater efficiency. If the argument for efficiency were made, we should have to take account of it, but it is not.

Mr. James Paice (Cambridgeshire, South-East)

Will the hon. Gentleman give way?

Mr. Meacher

No. I have given way many times.

The right hon. Gentleman likes to claim that there have been savings of £100 million. What he does not say is that the cost of private consultancies has been at least that much—on the basis of some estimates, nine times that much. When extolling the merits of private contractors, the right hon. Gentleman likes to cite experience in the United States, where private contracting has been commonplace since the Reagan regime of the early 1980s. That experience is very interesting, and I have had a look at it. What it shows is that, far from improving the level of public service, the policy has resulted in wasted money, falling standards of service and exploitation of public sector workers, who have become increasingly demotivated and subsequently less productive.

Our third and, I think, the major objection to the whole system of private patronage and secret deals is that it is wide open to corruption and fraud. The recent Public Accounts Committee report entitled "The Proper Conduct of Public Business" is a scathing indictment—the most scathing in my experience—of the culture of some of these quangos. If the Chief Secretary to the Treasury thinks that foreigners are corrupt, he could have a field day if he were let loose on some of his own colleagues' appointees: the international director of the Welsh Development Agency, who served only nine weeks of a four-month posting to the United States and was then brought home on "gardening leave" for eight months until his fiftieth birthday, when he received a £228,000 retirement settlement; the so-called independent consultant used by the Wessex regional health authority, who turned out to be employed by IBM, and the subsequent waste of £20 million when the regional health authority was forced to abandon its computer system.

There are so many examples, including the case of the director of regionally managed services for the West Midlands regional health authority, who, according to the Comptroller and Auditor General, should have been dismissed for irregularities but was actually given an £81,000 pay-off. The latest example says it all. In Tory Britain, in the public domain, if one is incompetent, let alone guilty of misconduct, one is unceremoniously sacked. In the private domain one gets a golden parachute. That is what happens to people on quangos who misbehave.

Corruption is not confined to one organisation as opposed to another. Our charge is that the Government's policy of privately appointed bodies with secret meetings, privately arranged audit and an absence of surcharge facilitates—even encourages—corruption and fraud. That is not just my view; it is also the view of Peat Marwick, whose head of investigation said a few weeks ago: More and more outsourcing in the public sector will mean more and more opportunities for procurement fraud. As more and more people outside the main buying departments become involved in the decisions, the scope for fraud grows. The power of the unelected state has grown dramatically in the last 15 years. It is still growing, and it should be cut back. The Labour party will bring a large part of the functions of appointed bodies back within the elected control of regional and unitary authorities. We shall subject these bodies to the same surcharge discipline as is applied, quite rightly, to local elected authorities, and we shall impose a much tighter public supervision system such as already exists in many other countries. The Opposition believe that democracy and openness should prevail—not patronage, sleaze or secrecy.

For all the reasons that I have set out, I strongly commend the motion to the House.

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

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'congratulates the Government on the reduction by 36 per cent. in the numbers of Non-Departmental Public Bodies over the last fourteen years as well as on the gains in value for money that have been achieved through the introduction of compulsory competitive tendering in local government and the Competing for Quality initiative in Whitehall; rejects the proposition that contracting for services implies loss of accountability; welcomes the continuous improvement in the quality, value for money and responsiveness of public services not least through the implementation of the principles of the Citizen's Charter; notes that this Government's establishment of the Audit Commission and the increased powers and independence given to the Comptroller and Auditor General have led to more effective control of fraud and waste; and applauds the Government's continuing commitment to high standards in public life.'. It is always a pleasure to debate with the hon. Member for Oldham, West (Mr. Meacher). As he obviously did not know the name of the Great Ormond street person who had been appointed in the dying days of the last Labour Government, I shall tell him that it was the excellent Mrs. Callaghan, now Lady Callaghan. I make no complaint about that. The hon. Gentleman described it as a triviality. Such matters are trivialities when they are Labour appointments but deep constitutional issues when they are Conservative appointments.

There is another point about which I ought to warn the hon. Gentleman before coming to the main part of my speech. If he is to argue that it is in all circumstances wrong for the Crown to claim public interest immunity for classes of documents of the kind in respect of which he was criticising, he ought to be aware of the fact that the last Labour Government did so on several occasions. I have before me a note of the 1975 Burmah Oil Company case, in which the Crown, in the shape of the Minister of the day, contended that it was necessary for the proper functioning of the public service for all such documents to be withheld. He should learn a little more about that subject before he criticises. [HoN. MEMBERS: "What about Scott?"] Sir Richard Scott knows that and much more about the subject.

My hon. Friends may remember that, during a previous debate, the hon. Member for Oldham, West made a fool of himself by purporting to show, by brandishing a leaked letter from a Department, that the public sector was inherently better at keeping secrets than the private sector. The motion tabled by the hon. Gentleman deplores the increases in spending, but his party has argued for spending increases on housing and health and attacks us when we try to bring spending under control, for example because of the growth in legal aid.

Let me explain how the hon. Gentleman has once again got himself into such an absurd position. The motion deplores the increase in spending by quangos. There are two definitions of quangos. The proper and strict one was first invented by Sir Leo Pliatzky in his review in 1979. He said that it was odd to use the American term "quango", which means quasi-autonomous non-governmental organisation, to describe organisations that—according to the central part of the criticism of the hon. Member for Oldham, West—were essentially governmental. He proposed a change of name to non-departmental public bodies, which makes more sense although it is less easy to pronounce. He found that there were 2,167 such organisations in 1979. The number has now fallen to 1,389. That is an achievement of which my hon. Friends can be, and are, proud, although there is much more to do.

It is helpful of the hon. Member for Oldham, West to allow me to remind the House of that 36 per cent. drop in NDPBs since 1979 and I thank him.

Mr. David Hanson (Delyn)

By how much have the costs of public bodies increased since 1979? I understand that those costs have grossly increased, although the figures quoted by the Secretary of State are correct.

Mr. Waldegrave

The hon. Gentleman is helpful because I was just coming to that argument. I shall give him and the hon. Member for Oldham, West their due. It is true that expenditure has increased and when one considers the statistics the cause is overwhelmingly clear. There was an increased spend by the Housing Corporation of £785 million—about 50 per cent.—and by Scottish Homes of £108 million in 1992–93 over 1991–92. Those are major providers of social housing, via such means as housing associations. The Housing Corporation figures include the widely welcomed £577 million package, which helped housing associations to buy thousands of empty properties to house homeless families. Is the hon. Member for Oldham, West against that? Surely he is not. He wanted far more expenditure by what he would call a quango.

Mr. Matthew Taylor (Truro)

The Minister rightly said that housing association expenditure has increased, but that has been paralleled by even larger cuts in local authority expenditure. Instead of locally elected and accountable councillors making decisions on expenditure, unelected appointees are making them. The Minister is advancing the Opposition's argument and not the Government's.

Mr. Waldegrave

The Government have defended their overt policy that the shift to locally based housing associations should be made. In many parts of the country, the Liberal Democrat party has supported us in that policy. It has many distinguished representatives on those housing associations. We have made no secret of the fact that we believe that tenants obtain a better service from housing associations than from making even larger the huge publicly owned tenancies of local authorities in Leeds, Bristol or any of the great cities. It is right that we should be boosting the Housing Corporation.

Let us return to the figures. There has been another salient growth in spend with the Legal Aid Board and its parallel, the Scottish Legal Aid Board. Together, they grew by £250 million in 1992–93 over 1991–92. That is the other great increase in recent times.

Mr. Jack Straw (Blackburn)

The right hon. Gentleman discloses his intense defensiveness about the issue by evading the central charge made by my hon. Friend the Member for Oldham, West (Mr. Meacher). That charge did not involve the Legal Aid Board or housing associations—he never mentioned them. He said that major spending powers in the transport, the higher education, the grant-maintained schools, the further education and, above all, the health and training sectors had been shifted from the elected state to the unelected state. At today's prices, there has been £24,000 million of spending per year in those sectors since 1979. Will the right hon. Gentleman justify that extraordinary shift in power from the elected state and elected local people to unelected appointees of central Government?

Mr. Waldegrave

The hon. Gentleman will hear such a definition. I started my speech with the proper definition of NDPBs. I shall deal with the wider definition in a moment, although he should know better than to say that the health service has never been responsible to locally elected members. It had a few locally elected people in it, but the great debate between Morrison and Bevan at its foundation was that it should not be controlled by locally elected members. Bevan and Cripps won that debate and so the health service was never controlled by locally elected people.

Mr. David Nicholson

The issue of scrutiny and accountability, which was raised by the hon. Member for Blackburn (Mr. Straw), is most important to the debate. Does my right hon. Friend agree that a number of those services are subject to scrutiny by, in particular, Select Committees such as the Public Accounts Committee and the Select Committee on the Parliamentary Commissioner of Administration, on both of which I have served? Several other of their members are present in the Chamber. Those Committees have uncovered abuses in certain organisations such as the Welsh Development Agency. The Select Committee on the Parliamentary Commissioner of Administration grills health trusts and others about individual abuses. Will my right hon. Friend speculate on what would happen to the NHS, especially in inner London, if it were controlled by local authorities?

Mr. Waldegrave

The arguments against that and for politicising local health decisions were well made all those years ago by Aneurin Bevan and remain valid today. He was right.

I mentioned the figures for the Legal Aid Board. My noble and learned Friend the Lord Chancellor has made himself extremely unpopular with sections of the legal profession by seeking to control the exponential growth in expenditure in that sector. Will the hon. Member for Oldham, West support us in that battle? Of course not. The hon. Member for Brent, South (Mr. Boateng) said that he would fight the changes tooth and nail. The hon. Member for Oldham, West wants far more funds for legal aid and far more expenditure by what he would call a quango. He does not seem lo have produced a very powerful argument.

There is a second, more current and rather bogus definition of quangos, to which the hon. Member for Blackburn (Mr. Straw) referred. It was first used by The Guardian and was quoted without attribution by the hon. Member for Oldham, West. It includes many additional definitions besides the Pliatzky definition.

I shall explain The Guardian thesis for my hon. Friends who have not read the original article. It claims that there will be about 7,700 quangos by 1996, spending £54 billion—I think that that was the figure. There are various gradations in between, some of which were quoted by the hon. Member for Blackburn and some by the hon. Member for Oldham, West. It reached that figure by including the national health service, assuming that all hospitals will be trusts and by including, among other things, training and enterprise councils and local enterprise companies, which are in the private sector, and police authorities.

The Labour motion deplores an increase, therefore, in health, training and police expenditure. If the hon. Member for Oldham, West goes on like that, he will shortly be suing someone for claiming that he is in favour of the control of public expenditure. My party has increased expenditure on the police and health service since it was elected. Those were our pledges and we have kept them.

The inclusion of trust hospitals and district health authorities as quangos enables me to turn the hon. Member's argument against him in another important respect. The health service reforms make local health appointments far more visible than they were before. People know who chairs and serves on the local hospital board, as they did with teaching hospitals until the reforms of 1974.

Several hon. Members


Mr. Waldegrave

I shall complete my argument before giving way again.

District authority chairmen too have a high profile, seeking to analyse the health needs of their localities and to spend public money to meet those needs.

Mr. John Denham (Southampton, Itchen)

As we are talking about health service appointments, does the Minister recall that when he was a Minister at the Department of Health he appointed Sir Robin Buchanan, who was then the chair of Wessex regional health authority, to be the chair of the NHS Supplies Authority? Does he also recall that a year before making that appointment he had received a confidential auditors' report criticising contracts that had been negotiated by Sir Robin Buchanan in Wessex? Why did he then make that appointment? Was it because Sir Robin Buchanan had been a long-serving member of the Conservative party and a Conservative councillor and protecting his position was more important than acting on the information that the Minister then had and that the House now has only as a result of the Public Accounts Committee inquiry?

Mr. Waldegrave

Of course not. It was because Sir Robin Buchanan was judged to be the best person for the task. It would have been quite wrong to have criticised him before any auditors' report had been undertaken or received. From time to time Ministers receive allegations of all kinds, but it would have been quite wrong to have judged him before the Public Accounts Committee had looked into the case.

Regional chairmen and boards also have a high public profile. They are indeed appointed. However, the hon. Member for Blackburn argues that there are more such appointments now than before the reforms. The exact opposite is the truth. There are now 3,500 such appointments as opposed to 6,500 appointments before. Let me remind the House why.

Under the 1974 system, there were three administrative tiers before reaching the hospital. [Interruption.] It was indeed set up by the last Tory Government. It was a bipartisan system, not opposed by the Labour party, but I am not defending it. We have reformed it and rightly so. The 1974 system had three administrative tiers—there were regions, there were areas, which we abolished in 1982, there were districts and there were very large family practitioner committees. That is why the total of appointed people amounted to 6,500, or 3,000 more than in the reformed system.

We now have the trusts, we have the regions, shortly to be brought down from 14 to eight and then—I hope and if the House agrees—abolished. We do not have areas because we have abolished them already. We are amalgamating districts into larger units. For example, in my area, the Bristol and District purchasing authority is one unit instead of three and we are doing the same for family health authorities, which are already smaller than the old FPCs. The net result is fewer appointments than there were in the unreformed system.

Mr. Gerry Steinberg (City of Durham)

Will the Minister comment on his point about open government in terms of appointments to trusts? Three trusts have just been set up in my constituency: the acute hospital trust, the ambulance trust and the community care trust. Appointments have been made to those trusts. When I asked the chairmen of each of those trusts who had been nominated for appointment to those trusts, they refused to give me the names and said that it was none of my business. The only information that they were prepared to give me was that they had made decisions on the appointments to two of those trusts. They were not prepared to say who else had been nominated or how they had selected from the nominations.

Mr. Waldegrave

In a wide range of posts it is standard procedure not to publish the names of those who fail to be appointed. It would have been standard procedure for most appointments under the last Labour Government. It is of course necessary to know who is appointed, but that policy is quite right for those who may have applied in confidence.

Mr. Michael Fabricant (Mid-Staffordshire)

Is my right hon. Friend aware that in Lichfield there are many more members of the Royal National Lifeboat Institution, the girl guides, the boys brigade, the boy scouts and the Women's Royal Voluntary Service who belong to the Conservative party than are members of the local Labour party? [HON. MEMBERS: How do you know?) I know because I go to the events because I am a good constituency Member. Does my right hon. Friend suppose that it is due to corruption in those organisations, or is it because more Conservatives are concerned with the community and volunteer to join such organisations?

Mr. Waldegrave

I know my hon. Friend to be a good constituency Member, but I had better not get too involved with the girl guides in Lichfield.

Mr. Richards

The central point raised by the hon. Member for Blackburn (Mr. Straw) is that he objects to Government appointees. Is my right hon. Friend aware that in the run-up to the last general election, the hon. Member for Alyn and Deeside (Mr. Jones), who was the Opposition spokesman on Welsh affairs, had drawn up a list of Labour party supporters that he intended to appoint to quangos in Wales? The hon. Member for Alyn and Deeside has been challenged on that many times, as has the right hon. Member for Islwyn (Mr. Kinnock), who was then the Leader of the Opposition. Neither the hon. Gentleman nor the right hon. Gentleman has denied that that list was drawn up.

Mr. Waldegrave

Were the Labour party to set out to persuade the House that it had never used political patronage in Wales, I do not think that it would get very far. The truth is that the old health service structure was far more replete with what The Guardian describes as quangos than the new structure.

Before we get on to the accountability argument, I should explain to my hon. Friends that we have not forgotten Margaret Thatcher's warning that there will always be pressure for new bodies and her promise that we shall be robust in resisting them —and so we have.

Since 1979, there has been a 36 per cent. reduction in NDPBs from about 2,100 to under 1,400. Among those abolished in the past few years alone, I choose at random the Open university visiting committee, the National Dock Labour Board, the Bureau of Hygiene and Tropical Diseases Managing Committee, the National Economic Development Office, the clothing and allied products industry training board and the Agricultural Statistics Consultative Committee.

Looking at Labour Members while I read out those lists, I felt a certain sense of indignation among the Opposition. The Labour party grieves for NEDO. [Interruption.] I was able to predict the hon. Gentleman's words. Did not the hon. Gentleman oppose the abolition of NEDO?

Mr. Meacher


Mr. Waldegrave

Thank you very much. Did not the hon. Gentleman strongly oppose the abolition of the National Dock Labour Board? The Labour party grieves for those relics of the corporate state; it opposed their abolition. In 1992, the Opposition made it quite clear that if they were elected there would be a wild increase in the number of quangos, because they would set up new ones. They mentioned 17 different types of quangos in their 1992 manifesto, such as the cultural education commission, the regional development agencies, the national investment bank—I think that I know the noble Lord who might have been the chairman of that—the endless wages councils and so on.

Since the election, the proposed quangos are still breeding—the cultural education commission has now produced a cultural education partnership. The Labour party is, and always has been, the party of corporatism and has a nerve to use the arguments that we have heard today.

Mr. Meacher

The Minister has been sitting up far too late in bed reading frightening fairy tales about the huge numbers of quangos. The real point that he has not addressed has nothing to do with the numbers. First, it concerns the switch from advisory bodies—many of which we are perfectly happy to see go—to major executive functions which were previously held by local government. Secondly, spending has gone through the roof—it is taxpayers' money unaccountably spent—and, thirdly, membership is no longer balanced but overwhelmingly partisan in favour of the Tory party.

Mr. Waldegrave

I am delighted with the hon. Gentleman's description of the last Labour manifesto as a frightening fairy tale. It is a pretty good definition.

I have already shown how the expansion in expenditure is overwhelmingly because of the increased health service spend, of which we are proud, and I shall return to accountability in a moment. In the health service under the present system there is a far more open and accountable structure of decision-taking than before. There is now a proper analysis of the health status of local populations. [Interruption.] Before Opposition Members say, "Nonsense", they should read their own party's document which entirely accepts the new structure of purchaser and provider that we have established. I am glad about that because their representative at the last election was much more equivocal about it.

Several hon. Members


Mr. Waldegrave

I shall give way once more.

Mr. Terry Davis (Birmingham, Hodge Hill)

On the specific and important point about availability of information to the public, and the example of the health service that the right hon. Gentleman gave, is not it a fact that whichever Government were in power before, under the previous system, information about the finances of local health authorities was available to anyone who was interested? Under the new system with hospital trusts, that information is not available. If anybody, including hon. Members, asks for details about the business plans or accounts of hospitals, it is not given to them.

Mr. Waldegrave

The hon. Gentleman, who is an expert on those matters, knows well that the trust hospitals produce annual reports, which have to be published. The district health authorities produce far more useable and interesting information, because it is now based on the analysis of health need set against the funds that are available to them. For the first time in the history of the health service, a proper debate about health priorities can now be had.

Mr. Davis

The right hon. Gentleman, undoubtedly inadvertently and through ignorance, is misleading the House. We are talking not about analyses of public health but about the financial figures. Is the right hon. Gentleman telling the House that if any hon. Member approaches a hospital trust in future and says that the right hon. Gentleman has given authority for that information to be made available, it will be? I assure him that in the past it has not been, and I and many of my hon. Friends have been refused that information by hospitals trusts.

Mr. Waldegrave

What I said is perfectly true. Hospital trusts must produce an annual report and must have a meeting at which they are cross-examined about it. Let me develop the argument a little further. A good report has been put out today by the King's Fund. Accountability in the health service is now far clearer than it was before: we now have providers who are in the job of analyzing health need, providers who can compete to produce health care most efficiently, of the highest quality and with the best value for money.

Mr. Straw

I want to support the point that was raised by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis). First, it is no good the Minister quoting the King's Fund report, because it is damning about the experience of trusts. Secondly, is the right hon. Gentleman aware—to give one example of the now-private running of what used to be the public's health service—that I asked the East Lancashire health consortium, which is about to become the East Lancashire purchasing authority, for its costings and also why it had moved the authority's headquarters to a business park in the borough of Pendle—straightforward questions. Had that same decision been made by a local authority, or previously by a health authority, those figures would have been available on the record. That information has been refused to me. Why?

Mr. Waldegrave

The hon. Member for Birmingham, Hodge Hill (Mr. Davis) asked whether trusts give a proper account of their spending to the House and to local electors. The answer is yes. I shall look into the specific case that the hon. Member for Blackburn raises, because I accept his basic premise that there is no reason for secrecy in those matters. The hon. Gentleman then rather shot himself in the foot by saying that the King's Fund report criticised the reforms. I happen to have it before me, because I thought that he might make that mistake. Its conclusion is this: The research shows"— these are Professors Ray Robinson and Julian LeGrand, who presided over a wide group of other researchers— that systems have now been put in place which offer the potential for real gains over the next few years. That shows that the reforms are well based—

Mr. Nick Raynsford (Greenwich)


Dr. Lynne Jones (Birmingham, Selly Oak)


Mr. Waldegrave

I shall give way to the hon. Gentleman.

Mr. Raynsford

I am grateful to the Minister. As we are now dealing with information, and he has an obvious concern about the openness of Government, does he think it right that, on an issue of grave public concern, involving a highly publicised case of an 80-year-old woman who was lost in my district general hospital, a question that I asked back in November of last year about staffing levels in the hospital at that time has not been answered, despite seven repeated requests from my office to the chairman of the health care trust? Is it right and proper that someone in that position, responsible for managing a body with huge influence over the health care of people in the district, should refuse and decline to answer a simple straightforward question about staffing levels at a time when a serious problem occurred in the hospital?

Mr. Waldegrave

I am surprised by that, and that the hon. Gentleman has not tabled a question to my right hon. Friend the Secretary of State for Health, who I am sure would have answered the question as she is responsible for the health service, as her predecessors would have been under the previous system.

The hon. Member for Oldham, West mentioned agencies and included them among quangos. He should know, and does know, I am sure, that agencies remain properly and fully members of the civil service. Their heads and staff are members of the civil service. If it is proper, they are privatised. The hon. Gentleman therefore need have no fear that accountability there has changed. I know that the right hon. Member for Manchester, Gorton (Mr. Kaufman) objects to the idea that he should have answers in the first instance from the heads of the agencies and prefers to get answers in every case from the Minister responsible. That is his right. If he insists on that, that will be done. I believe that many hon. Members—

Mr. Gerald Kaufman (Manchester, Gorton)


Mr. Waldegrave

I did say that I would give way no more, but I have mentioned the right hon. Gentleman.

Mr. Kaufman

Will the Minister give a categorical assurance therefore that when I seek an answer from a Minister and refuse to accept an answer from a chief executive of a next steps or other agency, my wishes will be abided by and a Minister will reply to me? If he gives that assurance, that would be an important statement.

Mr. Waldegrave

In the first instance, the Minister will be likely—although not in every case—to refer the matter to the chief executive. If the right hon. Gentleman is dissatisfied with the reply, he has the absolute right to return to the Minister. The Minister remains accountable.

Mr. Kaufman


Mr. Waldegrave

No, I must press on. The right hon. Gentleman will have an opportunity to make a speech.

The motion deals with management by contract and contracting out. That seems to me to be an odd matter for the Labour party to criticise when the hon. Member for Blackburn is on the Front Bench, because he is on record as roundly and strongly endorsing last year the concept of compulsory competitive tendering. In Tribune, he said: There is a wide acceptance that the division between contractor and provider that CCT has produced has been sensible … I have seen the case for CCT for the provision of basic services. That piece of the motion seems to fall on the evidence of the hon. Gentleman. Many other Labour Members who are familiar with local government would endorse what he said on that occasion.

The second argument raised against the reforms that move central Government and local government towards the enabling role, and away from always seeking to provide everything that is needed, is that standards of propriety will fall and that the public service ethic—in the good sense—will be damaged. I refute that most strongly.

Mr. Straw

Will the Minister give way on that point?

Mr. Waldegrave

I do not think that the hon. Gentleman was even listening when I referred to him before. [HON. MEMBERS: "Yes, he was."] I do not think that he was. It is not fair that he should try to intervene, because when I read out quite a long passage by him, he was not even listening.

We referred earlier to the PAC report, which stirred much interest recently. It is sensible report. I welcomed it at the time and welcome it again today. It says: Some allege that the drive for economy and efficiency must be held back to some extent because of the need to take specific care with public money. Others argue that if economy and efficiency are to be forcibly pursued then traditional standards must be relaxed. We firmly reject both these claims. The first is often urged by those who do not want to accept the challenge of securing beneficial change. And the second is often put forward by those who do not want to be bothered to observe the right standards of public stewardship. Quite apart from the important moral and other aspects involved we consider that any failure to respect and care for the public money would be a most important cause of a decline in the efficiency of public business"— quite right— but there is no reason why a proper concern for the sensible conduct of public business and care for honest handling of public money should not be combined with effective programmes for promoting economy and efficiency. I quoted that report at length because part of Labour's campaign—we heard it again today from the hon. Member for Oldham, West—is to try to misrepresent it as an attack on our public sector reforms. Nothing in the report does that, as I hope we may hear later.

Mr. Garrett

Will the right hon. Gentleman give way?

Mr. Waldegrave

I think that I have given way enough. The hon. Gentleman will make his own speech at the end of the debate, in protected time.

On the contrary, the PAC report is a helpful reminder that we must ensure that the more effective audit arrangements that now exist relate properly to the more sophisticated and devolved structures that we now have. The PAC's checklist is helpful, and we shall ensure that all relevant public bodies are fully aware of the points that it has raised.

However, the House should be quite clear on one point. The growth in the authority and reach of our audit system and particularly the growth in value-for-money audit are the direct result of actions taken by the Government. Among others, there were Labour campaigners and I pay tribute to them. It was we who set up the Audit Commission in the Local Government Finance Act 1982; it was in 1983 that the National Audit Act was passed, making the Comptroller and Auditor General an Officer of the Parliament and giving him a value-for-money remit. We made a rod for our own backs, but I am proud of that.

Mr. Meacher


Mr. Waldegrave

No, I will not give way to the hon. Gentleman. We know what he was going to say. The Act was passed under the present Government, having been introduced by my right hon. and noble Friend Lord St John of Fawsley.

I am reminded of a remark made by Harold Macmillan about spies, a subject that we debated the day before yesterday. He said that he hoped MI5 would never catch any more spies so that there would be no more spy scandals. In real life, we want MI5 to catch the spies and in real life we want the Comptroller and Auditor General and the PAC to do their work properly. If they were finding nothing, I would think that they were not fulfilling their duties.

In a public service the size of ours, a real watchdog will always find things if he is any good. That more is found and more pursued now is largely a sign of a more effective watchdog which has enormously developed the concept of value-for-money audit rather than the concept of lowered standards on the part of civil servants—which I refute as a slur on those public servants. Nor do I accept that our fellow citizens who may work for the public as employees of private firms under contract do not accept the duties laid on them properly. It is an insult to them to suggest that. I want to reaffirm that the true public-service ethos of dedication to service needs, equity and honesty, remains the ethos that we require and shall enforce, whether the service is supplied directly by public servants or through a contract, on behalf of the public, with a private firm.

Let me end by replying in kind to the silliest part of the speech of the hon. Member for Oldham, West. He argued that the Conservatives had extended state patronage. Labour, he said, was against the leviathan state. What poppycock! Let me remind the House of a fact that it can add to our near-halving of the number of appointed posts in the national health service. When we came to power, the state had about 7.5 million servants—local government officers, crown servants, nationalised industry employees and so forth. By last year, the figure was below 5.5 million and falling, although I admit that it was still too high.

Mr.Terry Lewis (Worsley)

What about the quangos?

Mr. Waldegrave

The quangos are included in the figure. As I have said, it was still too high, but it was lower by 2 million than when Labour was in power—with all the associated reduction in patronage that that implies.

Virtually the whole of the great state industrial apparatus, with its hundreds of appointed chairmen and board members, has been returned—with the employees themselves—to the private sector, where such people belong and thrive. The Opposition complain about spending by organisations such as the Legal Aid Board and the Housing Corporation. We have paid for that spending many times over by reducing the amount of state-organised waste in the nationalised industries.

Let us Conservatives celebrate the turnaround from about £2.5 billion of taxpayers' money subsidising waste in old nationalised industries each year—

Mr. Meacher


Mr. Waldegrave

No, the hon. Gentleman can wait. Let us celebrate the turnaround to the present position—a net inflow of £60 million a week from privatised industries, and a huge cut in the size and patronage of the state.

Mr. Meacher


Mr. Waldegrave

I will give way once more to the hon. Gentleman, if he promises to remain seated after that.

Mr. Meacher

The right hon. Gentleman has now been speaking for 36 minutes, and he has not even mentioned the key point made by Opposition Members. Irrespective of the advisory and fairly unimportant quangos that have been removed, we are concerned about the quangos with substantial executive powers—and the fact that they have been packed with Tory appointees. When will the right hon. Gentleman come to that point?

Mr. Waldegrave

I have already dealt with the classic example that the hon. Gentleman picked—housing and the Housing Corporation. We have indeed increased the powers of the Housing Corporation, for a very good reason: we support the housing association movement. The hon. Gentleman has had plenty of opportunities to oppose that policy over the past 14 years, and we do not resile from it by one inch.

Many of the plum posts that have now gone were those to which Labour Governments used to appoint their friends in the old days, in the name of scaling the commanding heights of the economy. Those were the days of true state patronage; indeed, so many key jobs went to Labour's non-elected trade union cronies that it was not clear whether the state was giving patronage to the TUC or vice versa.

Here is a typical product of the corporate state under Labour. Let us remember Mr. Jack Jones. As The Guardian observed in a leader on 17 July 1978, he may have retired but he is by no means idle. He remains—according to a recent written reply in the Commons—deputy chairman of the National Ports Council and a member of the Advisory, Conciliation and Arbitration Service, the Anglo-German Foundation for the study of Industrial Society, the British Overseas Trade Board, the board of the Crown Agents, the EEC Economic and Social Committee, the Iron and Steel Advisory Committee, the National Advisory Council on the Employment of Disabled People, the National Economic Development Council, the Royal Commission on Criminal Procedure, and the UK National Commission for UNESCO". Then there were Mrs. Jones's appointments. I have no time to go into them.

In 1977, 39 members of the TUC council between them held 180 state appointments. David Ennals simply fired 32 chairmen of health authorities whom he suspected of Conservative sympathies, replacing them with Labour placemen. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in a famous scandal, fired Diana Macleod from the National Gas Consumers Council to appoint a Labour placeman. Incidentally, the Labour party is still at it: 21 governors were removed from Hull's schools last year and seven from the East Riding's schools entirely because the Labour party wanted to ensure maximum control and prevent applications for grant-maintained status.

The fact that Labour dares to attack us over appointments to quangos shows that it believes the British people have a very short memory. Those were the days of real power patronage—when poor Mr. Wilson bleated, "Get your tanks off my lawn, Hughie", as hon. Members may remember, when the Prime Minister's son-in-law became ambassador in Washington and when George Woodcock explained how to get on to the gravy train. This is how it was done, apparently: seniority, the muscle power of your Union and competence. These are what you need to get a public job, and in that order of priority". It was too much even for some of Labour's supporters. I have here an article from The Scotsman, dated 4 August 1978. One Councillor George Foulkes was very indignant about the whole matter: he was worried that the Scottish Office had so many posts to fill that they were in danger of running out of enough experienced and 'creative thinking' people for the posts that needed to be filled". I somehow do not think that Councillor Foulkes's definition of "creative thinking" strayed far from the Labour line.

I have a list of known Labour supporters whom we have appointed to posts. I am proud of that—and my right hon. Friend the Prime Minister made some play of one example at Question Time today. We do appoint people to public jobs on merit, and I do not claim for a moment that all the talent is on one side of the political spectrum.

We had difficulty with the health service appointments, because before the election the hon. Member for Livingston (Mr. Cook) threatened Labour councillors and others if they were tempted to take posts on trust boards. As the House will remember, he went further and threatened NHS employees with dismissal if they carried out Government policy. [HON. MEMBERS: "That is not true."] It is true: the right hon. Member for Islwyn, then Leader of the Opposition, disowned him for it.

The Labour leopard has not changed its spots. In other areas, where Labour does not intimidate people—or, perhaps, where the people are not so easily intimidated; people like the hon. Member for Bradford, South (Mr. Cryer)—we find distinguished Labour supporters on quangos. I know that the hon. Gentleman's knowledge of the British film industry is extremely useful to the British Film Institute.

That is the proper tradition. That is the tradition that we shall maintain, that is the tradition of the House and the country. It is the tradition of fairness and impartiality, which my party will uphold, and it needs no lectures from Labour in doing so. I urge my right hon. and hon. Friends to support the amendment and make some sense of this absurd motion.

5.39 pm
Mr. Gerald Kaufman (Manchester, Gorton)

In response to a point of order before the debate began, Madam Speaker set the theme for the debate. She said: It is important that the Executive are answerable to the House". That is what the debate is about: the transfer of responsibility from Ministers who are accountable to the House to organisations which are not accountable to the House and can, therefore, behave in a reckless and dangerous manner without being held to account on the Floor of the House of Commons.

The Chancellor of the Duchy of Lancaster said that in the national health service we have an "open and accountable structure". I shall tell the House of Commons how the open and accountable structure of the national health service operates as a result of the activities of and legislation introduced by the Government.

On 17 March 1993, my constituent, Lorraine Kelly, of 16 Bates street, Longsight, walked out of Burton house, which was affiliated to Withington hospital in Manchester. Lorraine Kelly was a diagnosed schizophrenic. She had entered Burton house on 3 December 1992 and her sister had asked for her to be placed in a secure unit. Lorraine Kelly was under close observation. She was supposed to be looked in on every five minutes because she had twice attempted to commit suicide. She was not looked in on every five minutes and on 17 March she walked out of Burton house. It was impossible to trace her until, on 1 May last year, her body was found in the Manchester ship canal.

Miss Kelly's sister first asked the Secretary of State for Health to inquire into that extremely serious matter. The Secretary of State for Health, as is characteristic of her when she is approached on a matter relating to an individual, immediately passed the buck. She passed the buck to something called the NHS management executive and it immediately passed the buck to the South Manchester health authority, from which nothing useful has been heard since.

However, the sister of my constituent was not prepared to accept the circumstances in which Lorraine Kelly was allowed to die, or perhaps to kill herself, just like that. She contacted the Mental Health Act Commission, set up under statute by the Government in 1983. On 22 April 1993, a person called Miss Teresa Quinn, signing herself as an administrative officer, wrote from the Mental Health Act Commission to say that Miss Kelly's query was receiving attention. Almost a month passed by and then another person, called Jeanette Wilson, an executive officer of the Mental Health Act Commission, wrote again to my constituent's sister, saying that it was sorry to hear of her death and recommending further action, not by the commission, but by my constituent.

My constituent persisted. In November last year, she received a letter from someone called William Bingley, who is the chief executive of the Mental Health Act Commission. I have discovered, after nearly a week of attempting to obtain information from a Government who believe in open government, that he receives £41,000 a year for being chief executive. He wrote to my constituent's sister, saying that the Mental Health Act Commission was pursuing two concerns. That was in November, more than three months ago.

On 7 December 1993, my constituent's sister received a letter from yet a fourth person in the Mental Health Act Commission, Anne Hill, administrative officer, saying that the commission was continuing to investigate my constituent's complaints.

My constituent's sister is taking legal action and she has now been told on the telephone that the Mental Health Act Commission will refuse to continue its investigation unless she drops her legal action. It is nearly a year since her sister disappeared and it is 10 months since her sister was found dead.

We have a totally unaccountable system in which a Secretary of State who should have responded to that extremely serious matter did not respond but passed the buck. The matter should have lain with the Secretary of State, but what has happened is that it has been passed from organisation to organisation, including the Mental Health Act Commission, which messes about, and has four people—no doubt paid substantial salaries—writing letters that refer scarcely, if at all, to letters sent by other employees of the Mental Health Act Commission.

We have here as vivid an example as it is possible to find of what the Chancellor of the Duchy of Lancaster called an "open and accountable structure": a person who should have been watched, a person who was suicidal, was not watched: a person walked out of a hospital and died in dreadful circumstances; and, nearly a year later, my constituent's sister might as well have forgotten about it because nothing has been done. That is what the Government are creating—a corporate state, in which responsibility is being transferred from Ministers accountable to the House of Commons to organisations, people and institutions who do not give a damn; and the reason why they do not give a damn is that they cannot be called to account on the Floor of the House.

When I first entered the House of Commons as a Member in 1970, it was possible to raise a matter and obtain a reply. Now one has a Secretary of State for Health, like other Secretaries of State, who is simply a postbox, drawing an extremely large salary and doing nothing for it to redress individual grievance, which is what the House of Commons is about if it is about anything.

Mr. David Nicholson

I am sorry that the right hon. Gentleman should make what appears to be a party political issue of a tragic and grave case of maladministration. Has he or his constituent referred that serious matter to the Parliamentary Commissioner for Administration, who acts as the national health service commissioner, to whom constituents can refer matters directly without having to go through a Member of Parliament? The Select Committee on the Parliamentary Commissioner for Administration, on which the hon. Member for Blyth Valley (Mr. Campbell) and I both serve, examined a case from Wigan last week which was similar to the one that he mentioned, although not nearly as grave, and took it most severely.

Mr. Kaufman

I referred the matter to the Commissioner on Monday, but the hon. Gentleman is being impertinent when he says that my argument is a party political point. My constituent was in distress, and gave me permission to raise the matter publicly and to name her, because she was so angry that, nearly a year after she wrote to the Secretary of State for Health, the right hon. Lady had not responded to her and nothing had been done about it. I am afraid, therefore, that it is the hon. Gentleman who is making a party political point about a terrible example of negligence leading to death and human grief.

The Mental Health Act Commission is a statutory agency and that example of something that happened with the agency is something about which I have campaigned in the House since I returned to the Back Benches. It is not all the rubbish that the Chancellor of the Duchy talked about abolishing this quango or creating that quango; it is about transferring activities that were formerly the responsibility of Ministers accountable to the House to agencies which are no longer accountable to the House for their individual activities.

The Chancellor of the Duchy of Lancaster nearly made a very important commitment. Referring to me gratuitously, he said that I was campaigning to get responses from Ministers and that I had the right to get responses from Ministers. However, when I intervened to ask whether that meant that I would receive a reply from a Minister when I had written about a matter that had been transferred to an agency—Opposition Members fairly said yes and that it also applied to other Members of Parliament—the Minister resiled from what he is on the record as having said: that I had the right to a reply from a Minister. He said that, of course, the agency would reply in the first place and that I should have the right to come back to the Minister.

If I refer back to the Minister, however, I do not have the right to a reply from him. Unless I make a complete pest of myself, as I have been doing for 18 months, all that will happen is that the Minister will refer the issue back to the chief executive of the agency, poor Mr. Michael Bichard, who wishes that I had never heard of him, just as I wish that I had never heard of him. The Mental Health Act Commission—a statutory body—is only one such agency.

Before a general election, at the end of a Parliament, civil servants are authorised to speak to members of the shadow Cabinet. Before the previous election, the Secretary to the Cabinet tried to persuade us of the virtues of "next steps" agencies and expressed his hope that, if a Labour Government were elected—it is very proper that he should anticipate that possibility and it is the right way for civil servants to behave in the run-up to a general election—they would continue the "next steps" agencies. That is all water under the bridge, but, if we had been elected, I am afraid that I should have done my best to stop the growth of those agencies.

Mr. Waldegrave

The right hon. Gentleman is making a fair speech, but it is fair to put it on the record that the present leader of his party supported the "next steps" agencies at that time.

Mr. Kaufman

My right hon. and learned Friend did not and does not support the transfer of accountability away from the House, which is continuing relentlessly.

At the end of last year, there were 92 "next steps" agencies, in addition to 31 executive units of Customs and Excise and 33 executive offices of the Inland Revenue. The total number of civil servants in "next steps" agencies or working along "next steps" lines was 349,655 compared with 262,965 civil servants directly accountable to the House. A considerable majority of civil servants, therefore, are now working for agencies that are not directly accountable to the House.

The figures that I have just cited were for the end of 1993. Since then, more agencies have been created. We now have the War Pensions Agency, which has a budget of £55.8 million and a chief executive with a salary rising to £55,740, and from 1 April there will be a Prisons Agency. The existence of the latter means that if right hon. and hon. Members have a constituent in prison who, for example, wishes to be transferred nearer home on compassionate grounds, unless, like me, they are determined to make complete and continual nuisances of themselves, the Home Secretary will refuse to deal with the case and it will be transferred to the Prisons Agency. The Government are relentlessly creating these bodies, but, unlike the dock labour board or the Housing Corporation, for example, whose activities were created to be separate from the House, these agencies mean the direct transfer of accountability away from the House. That impinges on the right of right hon. and hon. Members to deal directly with Ministers on issues of individual grievances which is what this House is about, if it is about anything at all.

There is more. In the national health service, in addition to the Mental Health Act Commission, there are regional and district health authorities, trusts, consortia, purchasing authorities and God knows what else. In addition to the organisations that are publicly known, even if they are not publicly accountable, Ministers have made a number of informal arrangements.

If an hon. Member writes to the Foreign Secretary about an immigration or visa case, unless he is like me and causes trouble, he will get a reply not from the Foreign Secretary or another Minister at the Foreign Office but from a civil servant at the immigration correspondence unit. I refused to accept such letters and sent them back to Lord Howe, who became very annoyed and thought that I was exploiting my status as shadow Foreign Secretary. I was not; I was exercising my right as a Member of Parliament.

The same is true of immigration cases and dealings with the Home Office. If one has a problem with someone at a port of entry, one is supposed to talk to an immigration officer. I am not going to have a row with an immigration officer about a constituency issue because it is not fair to him and it is not fair to me. If I am to have a row, I shall have a row with a Minister because that is whom I am elected to have a row with and that is what he is appointed to do. He is not appointed to transfer problems to an immigration officer who operates within the rules. A Minister has the right to use his discretion to vary the rules, which is why one needs to be able to talk to a Minister.

When I first became a Member of Parliament in 1970, Ministers looked at almost everything. I dealt with members of the Conservative Government and I know that they examined individual cases. Now, however, they look at almost nothing. I want to know how a Minister can be held accountable for something that has not crossed his desk. That is the crucial issue. When I was a junior Minister, Ministers were given a boxful of letters to sign. They were in draft form, but Ministers read and signed them. Even if they did not read them, they signed them and were accountable for having signed them. Today, Ministers do not read them. Letters are passed across their desks on a conveyor belt and go to an agency, a unit, a trust or heaven knows what and the Minister is no longer held accountable.

It is curious that, in terms of the number of members of Administrations, this is the largest in the history of this country. Lady Thatcher's was once the largest, but the present Prime Minister has increased the membership even more. However, I do not know how Ministers spend their time. There are more than 100 but they have so little to do for which they are accountable.

I have been in correspondence with Madam Speaker on a most interesting matter referred to me by a constituent, Mr. C. Narrainen, who discovered that it is permissible for a member of the public to send a petition to a Member of Parliament without putting a postage stamp on it. I referred the matter to Madam Speaker and, after having had the matter investigated by the Serjeant at Arms, she told me that the Post Office had confirmed that an address or petition forwarded to a Member of Parliament or the House of Commons may be posted free of charge and set out certain conditions under which it should take place.

Parliament regards the right of redress of individual citizens as so important that it says that individual citizens may write to their Member of Parliament, send them a petition and not have to pay for sending it. But what is the good? They sign their petition and they are allowed to send it without a postage stamp, but they may as well not put it in a post box. They may as well put it in a litter bin, because when it comes here, the right hon. Gentlemen and Ladies on the Government Front Bench pay no attention because they are not accountable for what takes place.

The House of Commons votes supply. It does not vote that supply to be misused by agencies, but to be accounted for by Ministers. The House of Commons is about people. Thomas Rainborowe said in 1648: The poorest he that is in England bath a life to live as the greatest he. The poorest he that is in England has the right to have his or her case considered by a Minister of the Crown and to get a response through his or her Member of Parliament. It is because the Government are destroying that right that the debate is so important.

6 pm

Mr. David Wilshire (Spelthorne)

If I understand the Opposition correctly, they are making some interesting claims. Their motion asserts that the use of quangos and contractors somehow undermines accountability, that it somehow lowers service quality, that it somehow increases fraud and waste and, most strange of all, that it threatens standards in public life. At the outset, it would be churlish not to admit that the hon. Member for Oldham, West (Mr. Meacher) made quite an eloquent speech supporting such nonsense. Some of it was passionate, some of it, I must admit, was amusing and a little of it was even thoughtful, but absolutely all of it was wrong—for two simple reasons. In fact, the reasons are so simple that the Labour party ought to be able to grasp them.

First, the whole Labour case that we have heard today, and that, I fear, we shall hear in the future, is founded on false assumptions. Secondly, Labour's arguments are always riddled with muddle, with confusion and with misunderstanding. If one could ever disentangle that nonsense, it would reveal that the whole case is misguided and deeply damaging to the very institutions which it seeks to protect. As it always does, the Labour party seeks to make its case by using the same two totally false assumptions. The first is that, somehow, elected bodies, by definition, are more accountable than quangos. Secondly, for some reason that I have never managed to fathom, it assumes that public sector services, by definition, are superior to private sector services.

Mr. Mike Hall (Warrington, South)

They usually are.

Mr. Wilshire

The hon. Gentleman says that usually they are, but he needs only to examine what happens in the real world to discover that that is total rubbish. Both assumptions are not only false, but, as I hope to illustrate, utter nonsense.

Labour's first assumption, that elected bodies are somehow more accountable than quangos, reveals its lack of understanding at its absolute worse. When Labour Members assert that, they demonstrate that they do not understand the real meaning of accountability or understand the real role of elected representatives; worse still, they demonstrate that they do not even understand the true nature of local involvement in the whole process.

What are we to make of Labour's failure to understand what accountability is really about? We have heard a lot about what it is not about, but what are we to make about that failure to understand the truth? There are two amazing examples of that muddled thinking running through every attack that the Opposition make on quangos and on the so-called lack of accountability. The first bit of muddle is that Labour is always obsessed with the concept of accountability as power over something and as control of something, hence its preoccupation time and again with who runs what. While accountability is in large measure about power and control, it is also about something else, which is even more important: duty to other people.

Mr. Kilfoyle

Would the hon. Gentleman accept that accountability also depends on all relevant information about a body in question being in the public domain and being readily accessible to Members of Parliament and to the wider public?

Mr. Wilshire

That muddle is coming through again. The hon. Gentleman asks about accountability. Accountability has nothing to do with public bodies other than a public body being a part of the whole. Accountability, as I shall show in a moment, goes way beyond that. Confining any discussion to public bodies and elected representatives and the sort of argument that the hon. Gentleman is using demonstrates how bereft of understanding the Labour party is on that matter.

As I was saying, accountability is equally about duties, such as the duty to find the lowest possible cost and the duty to find the best provider, whether in the public sector or not. The hon. Gentleman is falling into the second part of the muddle that I keep hearing. The Labour party uses the words "accountability" and "democracy" as though they are interchangeable when, in reality, they are not. As the hon. Gentleman was in danger of demonstrating, when accountability becomes an obsession over the power and control in public bodies, two things happen. One becomes totally preoccupied with service providers and the provision of service and one begins to say that they must be accountable, therefore one must control them and so one must have information.

I was complaining about the hon. Gentleman because he instantly went into the "I must have" syndrome, which is deadly damaging. If one gets into that mind-set, one overlooks the duty to focus on the needs of people and so people exist only to use the services that one has deemed to be appropriate.

Mr. Kilfoyle

The hon. Gentleman has completely misinterpreted what I said. Will he answer my question about information? If information is not available, how does one begin to assess whether a body is in any way functioning properly, much less whether it is accountable in any objective terms to the House or to anywhere else?

Mr. Wilshire

During my attempts to obtain information when I served on other bodies, when I was a councillor and when I was here, I found that by working at it, I got the information that I needed. It is as simple as that. If the hon. Gentleman is having difficulty, perhaps he should examine his methods of trying to get information.

If one confuses accountability and democracy, one diminishes both. If one confines accountability to the public sector, one damages the elected representatives and freezes out any involvement at all of people who are not elected or of the customers and clients who use the services.

May I give one example of what I am trying to say? In the real world, not the fantasy world of the Labour party, a headteacher is not only accountable to the local council, although the Labour party would have us believe that that is what it is all about; in the real world, a headteacher is also accountable to pupils, to parents, to his profession, to staff and to local taxpayers. That is why I say that accountability goes so much further than the question of involving elected representatives in the process.

I shall say a word or two about Labour's failure to understand the real role of elected representatives. The hon. Member for Oldham, West thought that he was being clever in his reaction to my intervention, but it was a demonstration of my point. Labour's attacks on quangos and its wish to pack them with councillors reveal that it believes that elected representatives must have some sort of statutory role before they can make any worthwhile contribution. That simply is not true. If one believes that point of view, one ends up restricting the involvement of councillors in the bodies on which they sit. That again results in an obsession with service provision. For example, if a councillor can interest himself only in the services which are delegated by Acts of Parliament—the point that the hon. Member for Oldham, West was making when he was complaining that provision of certain services has been taken away from local government—issues such as hospital closures, vandalised telephone kiosks or a lack of decent shopping facilities in the locality could never appear on a council agenda, according to the hon. Gentleman's thesis.

That is the point that the hon. Gentleman ducked. Happily for us, even Labour councillors understand how wrong he is, because they do put such matters on agendas and discuss them. They understand that the real role of elected representatives goes far further than the bodies to which they can be appointed.

Similarly, the other point that the hon. Gentleman ducked is that if we followed his line councils and councillors would never be able to use their legal discretion to support pressure groups seeking to improve services in the public sector. Happily councils do exactly that, and long may they continue. If the Labour party does not understand that those are correct roles for local councillors, I am sorry, but they do not understand the nature of the beast that they are talking about.

The third muddle into which the Labour party gets itself centres on the question: what is the real nature of local involvement, be it in a quango or in a public sector service? When they seek to cure the imagined ills that they tell us about Labour Members cannot think beyond the simplistic solution of making local involvement mean local government involvement. Once again, they undermine the real role of councillors.

The blinkered thinking that we keep hearing from the Labour party exposes something else that it does not understand—the reality of local government taking place out there. [Laughter.] The hon. Member for Worsley (Mr. Lewis) may laugh, but let him try to answer a question. If he has had the same experience of local government that I have, does he not agree that what I am about to describe is what happens in the real world? Labour Members seem to assume that the United Kingdom is somehow blessed with an enormous pool of elected representatives with sufficient time and adequate skills to serve on all the boards, committees and panels that they would seek to set up if they ever formed the Government.

My 11 years in local government taught me something different. Anybody who has served in local government knows only too well about the farce called the council annual general meeting. Somewhere on the agenda, at item 10 or whatever, is the appointment of representatives to outside bodies—the very thing that the Labour party wants to happen more. At that point in any AGM councillors are press-ganged to serve on dozens, if not hundreds, of bodies—

Mr. Lewis


Mr. Wilshire

I and thousands of other councillors have sat through that process. Councillors are press-ganged into service, and no one explains the responsibilities or ever asks for a report back on what happened last year—

Mr. Lewis

My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said that he felt that one of the roles of Members of Parliament and councillors was to act as advocates for the people whom they represent. I endorse that. The bodies that the hon. Member for Spelthorne (Mr. Wilshire) is talking about are vital to the well-being of the people whom councillors represent. Typically, councillors live within the community that they represent. When I was a councillor—for far longer than 11 years—people used to knock on my door to secure my advocacy in various arguments with public bodies, and now that I have been in the House for 11 years, they still do. Tonight we are saying that there has been a huge transfer not only of power but of the spending of public money, away from locally elected councillors who are accountable and available, to business people who may not even live in the area.

The hon. Gentleman talks about councillors not having the time to go on outside bodies. The same argument applies to business people. I often wonder how they find the time to run their businesses as well as half of local and national government.

Mr. Wilshire

I struggled for a moment or two to understand what relevance the hon. Gentleman's intervention had to what I was saying, but I found out when he referred back to powers being taken away, and again demonstrated that obsession with powers.

The council annual general meeting is crucial to the case that I am making about why the Labour party's solution will not work. Nobody ever asks for the attendance records of outside bodies, because that would be deeply embarrassing. My right hon. Friend the Chancellor of the Duchy of Lancaster described his experience with the health authorities in Bristol. I do not know whether he recalls that when he and I both lived in that area I served on such bodies, but I know only too well that the attendance records for the appointed councillors from local authorities on all the health authorities in Bristol were desperately bad, whatever their political persuasion.

What happens when the reluctant appointees finally get to the outside bodies to which they have been appointed? They probably discover that meetings clash, and that they have council duties at the same time. They probably also discover that the bodies on to which they have been press-ganged require skills that they do not possess, and even that some of the meetings are so boring that they never bother to go again. That is the reality of local government. That is why relying exclusively, or almost exclusively, on councillors will not work.

Mr. Hall

I know that the hon. Gentleman speaks as a former leader of Wandsdyke district council. Does he claim that the experience that he has described to the House happens throughout local government? That is not my recollection of what happened when I was the leader of Warrington borough council.

Mr. Wilshire

It is nice to know that there is the isolated example that we could all follow, if only we knew where to find it. I do not suggest that everyone was as I described, but I was involved in local government for a long time, nationally as well as in my own council, and I have to tell the hon. Gentleman that the experience that I have described occurred throughout the country, irrespective of the political party in control.

Finally, I shall say a few words about Labour's second false assumption.—that public sector delivery of services is somehow or other, by mystical arrangement, superior to private sector delivery.

Mr. Garrett

It is in some cases.

Mr. Wilshire

In some cases yes; in other cases no. That claim reveals more of Labour's muddle and confusion on delivering services. Labour should concern itself with meeting people's needs. It is our real specialist task, whether we have been elected as Members of Parliament or as councillors, to ensure that needs are met, to listen to people's problems and to ensure that arrangements are made to meet their needs. It is not necessarily our task—certainly not exclusively our task—to meet those needs, either by providing the services ourselves or by poking our political noses into the businesses and organisations that provide the services.

If public services suffer from low standards, as the Labour motion suggests, and from waste and fraud, as Labour claims, that is more likely to arise from political involvement than from political disengagement. When Labour Members are busily attacking the private sector I always suspect that they are doing so in defence of their public sector union paymasters. The jibes that they use demonstrate that they simply do not understand. Labour's most common jibe is that privatisation does not improve services. Well, it did with British Telecom, as we find out if we listen to telephone users, and it did with British Airways, as we find out if we talk to regular air travellers.

Another jibe that the Labour party likes to use is that market testing does not save money. [HON. MEMBERS: "It does not."] Tell that to the millions of householders whose dustbins are now emptied by the private sector. A further Labour jibe is that quangos and contractors somehow lead to corruption. However, if I remember rightly, T. Dan Smith was a councillor, and Poulson went to prison for his dealings with local government contracts.

When all those jibes fail, the Labour party falls back on the few contracts in which it can find examples of things that have gone wrong. But in reality such mistakes are usually made because the contract rather than the contractor has got it wrong. And who writes the contracts? The beloved public sector that the Labour party sets out to defend as though it had a magical ability do things better.

So much for Labour's motion and Labour's case. The motion makes claims that are simply untrue. Their case is founded on false assumptions and their arguments are riddled with muddle and confusion—rather like a lump of old timber gnawed away by woodworm and covered with fungus. Until they understand what accountability really means, until they understand the real role of elected representatives and until they put people before the providers and their paymasters—the trade unions—they deserve to fester on the Opposition Benches. That is exactly where they will stay if they continue to come up with this sort of nonsense.

6.19 pm
Mr. Matthew Taylor (Truro)

This debate is on a constitutional issue. We have no written constitution, so we rely on convention and checks and balances for our democracy. We rely on the protection of elected representatives and accountability to the public. In that context, and in the context of this debate, I shall raise four main points: public sector accountability; burgeoning political patronage by Ministers; the huge mismanagement of public money; and the resulting destruction of our democracy, especially local democracy.

First, on accountability, it is simply wrong in principle for democratically elected councillors and Members of Parliament to be increasingly replaced by ministerial appointees. Despite Margaret Thatcher's promises in 1979 to contain the power of non-elected bodies, we have seen a real increase. In 1980, she said that there would always be pressure for new bodies and the Tory Government would be robust in resisting them. What she should have said is that they would be robust in redefining them.

In real terms, spending by quangos has grown by 20 per cent. since the Conservatives won power in 1979, promising to cut them back. Government sources have said, and the Minister said today, that the number of non-governmental public bodies has fallen from 2,167 in 1979 to 1,412 in 1993–perhaps it is a little less now.

The official Cabinet definition does not include all the executive bodies that the public regard as quangos. For most people, the term "quango" refers to all government by the non-elected. For them, the term includes all appointed bodies, from national health service trusts to training and enterprise councils.

A recent report by the Cardiff business school rightly estimates that unelected appointees to quangos have one fifth of the nation's public expenditure at their disposal. More than £25 billion has passed from local authorities to quangos. The report calculates that, by 1996, there will be approximately 7,700 quangos, on any ordinary person's definition of these things, spending some £54 billion of taxpayers' money.

Each Bill that is brought to the Floor of the House—whether it concerns education, health, transport, the police or training—seems to remove still more power from democratically elected local representatives, and passes it to non-elected Government appointees. Examples cif this increase in the power of quangos and the erosion of the power of local elected representatives can be seen in all aspects of society.

In education, grant-maintained schools, sixth form colleges and further education colleges have all been removed from oversight by locally elected, locally accountable councillors. Education is becoming controlled by quangos that are responsible solely to the Secretary of State. Bodies such as the Schools Curriculum and Assessment Authority determine much of what should be taught in schools while further and higher education funding councils dominate life in colleges and universities. The Funding Agency for Schools directs Government money to opted-out schools. In areas where more than 10 per cent. of pupils are in opted-out schools, it will increasingly have enormous education planning powers.

In the health service, local authority power has been removed in favour of Government appointees. Local representation was scrapped under legislation for the NHS internal market. At the same time, representatives from community health councils lost their right to speak at meetings. Taxpayers' money is going into the pockets of unelected officials and bureaucracy, instead of being spent on patient care.

Recently, the Minister finally admitted that, since the introduction of the internal market, the cost of NHS management and bureaucracy has almost doubled—from 6 per cent. to 11 per cent. In other words, bureaucracy shoots up, and money that should have been spent on health care is going into the pockets of non-elected bureaucrats, many of them appointed by Ministers.

Plans to change the composition of the police authorities will reduce the number of locally elected representatives. Listening to debates in the House of Lords, it is interesting to note how frequently former Ministers, who defended these things here, argue against the next step when they get to the House of Lords and have a little more freedom.

Local representatives would be marginalised by the appointment of five members of each authority by the Home Secretary. That would centralise power and remove any checks and balances on the role of the state over the police force. Unelected appointees would be able to demand money from the local authority to pay for what they deem the local police force should be doing, rather than responding to local representatives.

I must add, at least for hon. Members on this side of the House, that it is extraordinary to see the number of letters from local magistrates, who are not normally considered a body representative of radical or left-of-centre politics, making the precise point that I just made.

Mr. Streeter

On the point of double standards in public life, does the hon. Gentleman think that the public interest was served by the Liberal leader of Devon county council, Councillor Brian Greenslade, recently voting in his capacity as a county councillor to continue with the county council, and then going back to north Devon and voting in his capacity as a district councillor to abolish the county council? Is that the sort of double standard that the Liberal party espouses?

Mr. Taylor

I am sure that Mr. Greenslade is more than capable of explaining his votes. He will have to explain them, because he is an elected representative who will have to answer at the ballot box. That is more than can be said for many of the people whom I am talking about in this debate.

Those examples show the removal of power and taxpayers' money precisely from people who are accountable to the local taxpayer through the ballot box. This movement amounts to taxation without representation. The Government are centralising power and marginalising people who are given a mandate by the electorate.

It is relevant to take the situation in Wales as an example. At the last general election, 71 per cent. of the Welsh electorate voted against the Government. Only six of 38 seats are held by the Conservatives at present. The Government's response to this move of power from their auspices has been to create more than 100 quangos in Wales.

According to a survey by the department of city and regional planning at the university of Wales, in this financial year executive agencies spent 31 per cent.—almost one third—of the total Welsh Office budget. More than 1,400 people are appointed by Ministers in Wales alone. In other words, Conservatives in Wales have no need to worry that they cannot get elected; they can get appointed instead.

The Chancellor of the Duchy of Lancaster, who is supposedly responsible for freedom of information and the citizens charter, has defended this transfer of power by arguing that the injection of the private values of market testing into the public sector gives the public more power. He argues that, by making the public sector more responsive to the customer, accountability is increased. He claims that quangos are accountable to Ministers and therefore to Parliament.

However, Ministers are able to deny responsibility in practice while having an indirect say through their appointees. In the 1992–93 financial year, £40 million disappeared from training and enterprise council budgets, but there was no reprisal on Ministers here at Westminster—there were no resignations.

Contrary to the view expressed earlier by the Minister, all Members of Parliament have had experience of taking up a question with Ministers, who effectively say, "Not me, Guy," and refer them to an agency. It is time that Ministers were forced once again to admit, "It's a fair cop, Guy," just for once about some of the mistakes that are made. The Minister had no answer to the point that Ministers no longer respond to our letters. The Minister's signature is not on the bottom of the letter, except to say, "I pass it to the relevant agency."

In my own county of Cornwall, we can see the very real problems that the destruction of local accountability can cause. I refer first to the health service. Frankly, local people have watched in utter disbelief the mess that has been made of ministerial appointments to the trusts.

First, we saw a well respected chairman of the Cornwall Healthcare Trust sacked for no apparent reason and replaced by a woman with a Conservative party background but against the strong advice of local Members of Parliament, including Tory Members. The previous chairman took the matter to an industrial tribunal and had to be paid off. The non-executive directors then expressed no confidence in their new chair. She was forced to resign, and threatened legal action in turn. Who is responsible? Technically, it is the Secretary of State for Health. We are told that she took the decision on the appointment personally. Who is taking responsibility? No one.

In the case of the Royal Cornwall hospital trust, a well-respected chairman was not reappointed. He was given no reason and was understandably outraged, especially as he was the last to hear. I had to intervene before the Minister was even prepared to explain the decision to him.

Now we have the ambulance trust, where staff, doctors and just about everyone else has lost confidence in the senior management, but no one seems able to get it sorted out. That should come as no surprise. Against local opposition, successive mergers have left one trust serving four different health authorities with no one in a position to sort it out. It is demonstrably out of public control.

Mr. Paul Tyler (North Cornwall)

Is not a peculiarity of the situation with the ambulance trust the fact that a quango is answerable to another quango? Even if one gets an answer from the first quango, one cannot get through to the second because the area health authority is also appointed by the Minister. Is not that double whammy evidence of yet more complication and confusion in the system?

Mr. Taylor

I suspect that my hon. Friend has found, as I have, that that is yet another quango for which the Minister will decline to take responsibility, and he will pass the responsibility on. It helps the flow across the Minister's desk, I guess.

The NHS is not the only example, and nor is this new bureaucracy the only example, of the transfer of responsibility. In a week when it has been confirmed that South West Water prices have doubled in five years—and are set to double again—the management are reaping huge financial benefits, while we are told that Ministers have no responsibility for the mess.

The growth of government by quango has come in part at the expense of ministerial responsibility. However, it comes even more—in contrast to what the hon. Member for Spelthorne (Mr. Wilshire) said—at the expense of local democracy.

There may be problems with local councillors—certainly they do not always agree with Ministers—but those responsible are elected, and the public have some power to hold them accountable. Local authorities have certain requirements. For example, meetings must be held in public, documents must be available for scrutiny and the interests of councillors must be declared, and councillors are governed by strict rules of conduct. In many respects, those rules are far in advance of the procedures which cover this House.

Quangos that control large quantities of public money have few formulated regulations to control their operations. Members of quangos do not have to declare their interests, and Ministers say that they do not know the background of those members. Meetings can often be held behind closed doors, and there are few ways of holding those people accountable. Four out of five district health authorities are no longer willing to meet in public, even once a quarter.

Mr. Streeter

The hon. Gentleman seems to be hostile to quangos, if I understand his speech. Will he therefore explain why it is his party's policy to set up an office of utility regulation—itself a quango—to oversee its activities?

Mr. Taylor

The hon. Gentleman ought to be aware that that would get rid of some quangos by pulling all the utility regulation together, and by giving it greater powers to try to take control of precisely the type of problems which I mentioned in relation to South West Water. I believe that the hon. Gentleman has said that he supports us on that subject.

We need to tackle that matter, and we need the strength to tackle it. Given that those industries have been privatised, and that no one will argue that we can afford to take them back into the state sector, we must have the power to control them. The hon. Gentleman, who represents people who are trying to pay their water bills, ought to be well aware of that.

If the Government were genuinely interested in democracy and accountability, they would have reformed local government further, not neutered it. Rather than transferring power to quangos, we need to ensure that there is freedom of information in all areas of government.

Electoral reform would make local authorities more representative and would ensure that the excesses of the Lambeths and Liverpools, of which we hear so much from Ministers, could not have taken place. There has never been majority support for extremism on either right or left. Democratic reform is a way forward, not the antidemocratic moves by the Government.

I move on now to patronage. Ministers have failed to divulge facts and figures for the number of appointments which have been made. Secrecy surrounds the information on how those people have been selected and paid. That being the case, we must rely on more limited research. Nevertheless, the majority of recent appointments to bodies appear to be people who sympathise with Conservative party policy.

It is estimated by Cardiff business school that, in 1992, over 40,000 appointments were directly made by the Government and by Ministers. In the NHS alone, since 1991, openings for appointees have rapidly grown. Each of the 145 English district health authorities has five non-executives appointed. By April, it is estimated that there will be 400 trusts, which means that there is room for 2,000 non-executives to be appointed.

In the past, the people who were appointed have tended to be—I agree with the Minister that it was not always the case—appropriately qualified for the position. One might expect that those appointed to work in the public sector would look to the public interest, and not to a political view. However, people are increasingly appointed without any relevant qualifications, except perhaps that they sympathise with the Government.

Since the Government are coy about releasing details of the background of their appointees, a complete picture is hard to get. Recent research showed that 44 peers receive salaries from sitting on quangos. In that group are 31 Conservatives, 10 Labour peers, no Liberal Democrats and three Cross-Benchers.

In the "File on 4" programme which has been referred to, the Minister Baroness Denton said that the Tory party had never knowingly appointed a Labour supporter. The Chancellor of the Duchy of Lancaster said that she had been quoted out of context. Perhaps he could explain other things she said, and how they are out of context. She said: Well, of course, you don't put people in who are in conflict with what you are trying to achieve. That does not sound out of context to me.

Those people are paid highly for their services. When compared with the payments made to local councillors, they are paid extraordinarily well. Lady Anson, the chair of the Association of District Councils, said: you can spend one day a month on a District health authority and you get £5,000 which is more than any councillor will get in a whole year. That leads me to my third point, which is the huge amount of money which is wasted, mismanaged and improperly spent by quangos. The Public Accounts Committee has given 26 examples of how the inherent lack of accountability has led to the squandering of public moneys.

Wessex health authority was censured for wasting at least £20 million in an attempt to establish a regional information systems plan, which was abandoned in 1990. That money could have been spent on health care for the sick. The regional health authority failed to secure accountability from the regional general management.

The West Midlands health authority wasted over £10 million by mismanagement from a new and inexperienced appointee. As I have said, most appointees are inexperienced. The PAC report stated: he was able to follow his own path, making a bonfire of the rules in the process. In this instance, the director of regionally managed services was awarded redundancy after five years service, when, arguably, he should have been dismissed. He was awarded £82,000 in a lump sum and a yearly pension of £6,462.

Frankly, there is a breakdown of accountability and responsibility which is unacceptable. No Minister has come to the Floor of the House and said, "Mea culpa, it is my fault." In the old days, such incompetence would have been the fault of Ministers.

Mr. Waldegrave

The cases which the hon. Gentleman cites do not help his case at all. They were part of the old structure of the health service which have gone back for 25 years or more. They have nothing to do with the reforms, as they are both part of the pre-reform structures of the health service.

Mr. Taylor

The Minister is aware that I am talking not merely about the reforms, but about the role of the unelected state and the lack of accountability. That is what the debate is about, and the Minister should learn from the mistakes of the past.

The reason local government was created in the first place was to turn out the type of unelected public appointments which are now being reintroduced. A study—I forget which—referred to the creation of "a new squirearchy", and that is precisely what is happening. It was abandoned not merely for democratic reasons, but because it did not work. The Minister should remember that.

The falling standards in public life are damaging the fabric of society. Democracy is based on the idea that all citizens can participate and are therefore responsible. We need to trust the people elected as local representatives, but of course we need to have proper checks on them, not least through the ballot box. Given the prevalence of quangos and Ministers' unaccountability in the use of political patronage, it is little wonder that the public are increasingly disillusioned with government.

The removal of power from elected representatives denies the public any sense of participation in the system. Incidentally, it is common knowledge that it is harder to get good people to stand for local government, because people no longer believe that they would have power to do the things that are worth doing. They would simply carry out the Government's cuts.

The Liberal Democrats emphasise the need to return power to people at a local level. The public have to be given a real say in the government of their communities. Local representatives need to be allowed to retain power over their services and be held accountable to the public.

For example, there is no reason why the role of councillors should not be extended to the strategic and supervisory role of district health authorities. DHAs are no longer responsible for delivering the service, but they are responsible for overseeing it. That is a role for local representatives.

Mr. Wilshire

Will the hon. Gentleman give way?

Mr. Taylor

I am just finishing.

To Ministers who say that local democracy sometimes gets it wrong, I say, of course it does. So do quangos—look at the Public Accounts Committee reports. So do national Government—look at the poll tax and the current tax increases. The essence of local democracy and pluralism is that different people are free to make different choices, and they are accountable for the results of those choices. If Ministers do not like it, the truth is that it is because they do not believe in a pluralist democracy.

6.41 pm
Mr. Robert Jackson (Wantage)

The Opposition motion invites the House to review the progression towards an unelected state. If the House wants to review this matter to good effect, it will have to go a good deal deeper than the allegations of the hon. Member for Oldham, West (Mr. Meacher). I hope that he will not object if, following the lead of my right hon. Friend the Chancellor of the Duchy of Lancaster, I try to rise above the level that he adopted in introducing the debate.

To criticise the Government on this matter, the House needs to have a proper appreciation of the nature of the problems in the provision of public services which the Government seek to address. From my experience of serving as a Minister in two service-providing Departments, latterly in the Office of Public Service and Science, I would summarise the problems under two headings.

First, and perhaps most fundamental, there is the problem of funding the public services. In 1976 a distinguished former Labour Chancellor of the Exchequer, Roy Jenkins, speculated on whether there was a limit to the share of the gross domestic product that the Government could safely take in taxation and whether that limit had been reached at about 45 to 50 per cent. of GDP. The politics of the 1980s were dominated throughout the western world by a taxpayers' revolt which led to a new consensus in Britain. Since the 1992 general election, the Labour party has come around on the importance of avoiding tax increases. Today, all round the world, governments are struggling to keep down the proportion of GDP which is taken in tax and spent by governments in the provision of public services.

The second problem is that, although people will vote against tax increases, they value public services and they want the quality of those public services to improve. So the Government and the House must face the danger of deterioration in public services—both absolutely and relative to the quality of service in the private sector—unless we can either find new revenue resources to fund public services or improve the quality of the management of our public services, or both. It is here that the House will find the root of the phenomenon of the "progression of the unelected state".

What is happening within government is not a drive to centralisation for its own sake. It is the application of new ideas about management, which are designed to improve the quality of public services while holding down their cost. There is a new managerialism in Whitehall which derives from the experience of the private sector. Its main themes are a stronger strategic direction from the highest level of the organisation, especially in the form of setting measurable standards of performance, coupled with the devolution of executive responsibilities for delivering services and meeting standards to a level which is as close as possible to the ultimate user of the service. That is the philosophy behind the great wave of public service reforms which began in the mid-1980s and is still rolling forward.

That philosophy was given a classical form in the Education Reform Act 1988. Central standard-setting was established in the national curriculum and associated testing arrangements and this was combined with the delegation of budgets to schools and the opening up of parental choice. It has been developed in the national health service, with the shift of power from the health authorities to GP fundholders and national health trusts. In Whitehall it is embodied in the spinning off of executive functions into "next steps" agencies operated under contract with the central Departments, about which we have heard during the debate.

The logic of the new managerialism has led the Government to look closely at the whole range of inherited arrangements for the provision of public services. Central to those traditional arrangements is the elected local authority as a provider of services, jointly financed by the central state. It is no secret that central Government have viewed local government with some scepticism as to its efficiency and cost-effectiveness as a provider of services.

Three main problems have stood out. First, there has been excessive politicisation in local authority decision-making. That is something that hon. Members on both sides of the House can recognise. Secondly, there has been excessive influence of producer interests in some local authority-run public services, especially where trade unions are closely involved in local power structures with the Labour party. Thirdly, there has been an insufficiency of managerial talent and experience at the political level in local government. That point was touched on by the hon. Member for Truro (Mr. Taylor). Local government leadership is often not at the level appropriate to the tasks that the local authorities now face. Those are serious considerations. If we put our hands on our hearts, we will all admit that.

Nevertheless, the Government's attitude to local authorities has not been one of complete scepticism. The Government have made a serious effort to promote reforms in local government. The concept of the enabling authority, in which responsibility for service provision is separated from the direct provision of the service, has been introduced. New functions have been allocated to local government in respect of community care, following the Griffiths report. Currently, an attempt is being made to promote unitary authorities which are a precondition for greater effectiveness and transparency.

Notwithstanding those positive approaches to local authorities, there is no doubt that one of the most important features of the new managerialism in government has been the shift of responsibilities and power from local authorities to other bodies which are charged with providing public services. That is why we are debating this subject today.

The hon. Member for Oldham, West is in danger of misleading the House if he seeks to persuade it that the changes that have taken place are all in one direction—the direction of centralisation and the substitution of appointment for election. The shifts of responsibility have gone in a variety of directions. Not all the changes have been in the direction of centralisation; nor is it the case that everywhere elected people have been replaced by unelected people. Much of the shift of power from local authorities has been downwards to more local levels. For example, power has been shifted from local authority housing committees to elected, estate-based housing action trusts; from local authority education committees to elected school governors; from many NHS regional and district health authorities to GP fundholders and hospital trusts.

Moreover, much of the reorganisation has affected bodies which have never been elected. I think particularly of the NHS. My right hon. Friend the Chancellor of the Duchy of Lancaster pointed out that NHS bodies have never been elected bodies; they have always been appointed. Where shifts have taken place in this area, they have been downwards, away from the centre.

Nevertheless, it is certainly true that the Government have created a wide range of new unelected bodies responsible for public services and they have expanded the powers and responsibilities of many such bodies.That is the essence of what has been said in the House. Hence the expanding world of the new magistracy to which this debate calls attention and it is a real and important phenomenon.

I have tried to describe the background to these changes and I hope that, in doing so, I may have persuaded some hon. Members that there is a genuine attempt on the part of the Government to grapple with genuine dilemmas. The picture is much more complex than can be summed up by slogans about the benefits of election as against appointment, or about the virtues of decentralisation as against the exercise of central power. I do not agree with Dr. Pangloss, however, that everything is for the best in the best of all possible worlds, and what I want to do in the rest of my speech is to say something about what I see as difficulties in the Government's approach and what might be done to address those difficulties.

I am afraid that the vehemence of the partisanship of the hon. Member for Oldham, West has largely blinded him to the real nature of those difficulties, although they surfaced in the speeches of the right hon. Member for Manchester, Gorton (Mr. Kaufman) and the hon. Member for Truro.

The first difficulty is concerned with efficiency and with what might be called systems overload. There is a real risk of each Government Department pressing its own reform agenda and promoting too many changes too quickly, with insufficient regard for the interaction of those changes across the different areas of policy which fall within the spheres of different Government Departments. For instance, that is a real problem in the current reform of the machinery of central Government. In my own experience, another difficult area has been in respect of Government initiatives overlapping, duplicating and running into one another in inner city areas, where there is now a welcome shift to more local initiatives with the city challenge concept. Meanwhile, we are all aware of the way in which the process of local government structural reform is clashing with the reform agenda in a host of other areas, from the operation of community care to the funding of magistrates courts.

A second set of difficulties concerns a problem that has been touched on in the debate, that of accountability. I have no doubt that the managerial changes that we are seeing and that we are discussing today are improving what might be called "high accountability"—that is, the accountability of local managers to the centre, to the Treasury and to Parliament in respect of general policy and of finance. We have only to look at the sheer volume of the management information now published, although all too rarely debated here. There is, however, a gap opening up at the level of what I think of as "low accountability", the accountability of service providers in matters of detail to particular individual users. That is where I have sympathy with the point made by the right hon. Member for Gorton.

The Government are making valiant attempts to address the problem through the citizens charter, and through the setting of detailed performance standards and the establishment of accessible channels of redress. But I do not think that these are as effective as the discipline imposed by a disgruntled voter tackling his elected representative. That is certainly true in relation to services at the local level. Hon. Members have also only to think about their attempts to deal, on behalf of constituents, with the Child Support Agency, to name but one, to recognise this problem at the national level.

The third problem that I see arising from the current wave of managerial changes is that of legitimacy. When the Government of Lord Salisbury created the county councils at the end of the 19th century as a vehicle for the provision of the new services that the state was then undertaking, there was a certain Tory statecraft behind the new arrangements which we forget nowadays at our peril. It held that there were advantages for the state in a wide diffusion of responsibility, so that the workings of the national government were not clogged up with detailed problems of local administration and so that a wide cross-section of people were involved and indeed implicated in the processes of local government.

The present position is that Government-sponsored reforms are putting Ministers in the front line of responsibility for a whole range of matters where the competence of Government is limited and their execution of policy is all too fallible. The best instance of this is the sorry saga of the implementation of the national curriculum. It is an important and valuable instrument which I strongly support, but it represents a real challenge to the capacities of the Government and it is one that we must recognise they may not be capable by themselves of meeting. The danger is that if the Government take too much responsibility to themselves they will be faced more and more with an erosion of consent which may spill over from one area of policy to another, perhaps until there is an overall crisis of confidence in the capacity of Government. Some may argue that this is an aspect of the currently prevailing political mood.

The fourth problem has also been touched on in the debate. It is the problem of democracy. Although it may not be how the new managerialism sees the matter, local government is not simply a provider of services, nor is it only one among a wide range of possible alternatives for providing services. Local government is also a vital element in the fabric of democracy, in the operation of a society based on the principle and practice of self-government. Even the element of party, which is sometimes thought to undermine the efficacy of local government, is critical for the working of democracy. All of us here depend upon the health of the party system and if one of the roots of that system, local government, is being damaged by our attentions, we in this House are among those who will suffer.

What should the Government be doing about all this? I would not urge them to abandon the drive for managerial reform. The issues that I outlined at the beginning of my speech are too important and too difficult for that. But I do urge them to beware of the seductiveness of what Hugo Young, I think it was, christened "the big idea". In our system of government Ministers have only a short time to make their mark on their Departments and it is all too easy to take some prevailing idea—for example, the introduction of the concept of the market into the provision of public services, which was a valuable and good idea, by the way—as a sort of leitmotif and be led by it up hill and down dale until in the end the idea and its integrity seem to matter more than the complex reality to which it is being applied. So my first advice is to beware the big idea.

My second piece of advice would be to pay attention to the question whether particular ideas really work and whether they will work in the way that is intended. Too often pilot projects are not really pilots but vanguards. Too often ideas are taken over from the private sector without much attention either to their proven value in the world of business or to their applicability in public sector conditions, which are often very different. I have in mind the way in which performance pay is being introduced into public service management without sufficiently serious evaluation of its effectiveness in motivating public servants.

I conclude with two suggestions about institutions. The first is local government. I believe that the Government are sincere in their desire to turn over a new leaf with local government, but what we need is a clear, consistent and well-explained policy for strengthening the institutions of local government. The philosophy of unitary local government is a welcome step in this direction, however disruptive its introduction will be. The Government should think again about the way in which the business rate is raised. More will have to be done to build the confidence and strengthen the morale of local government and to attract better people to seek election to it. We should look again at payment for councillors. The Government must recognise that the more they create alternative vehicles for service provision, the less incentive they offer to good people to seek election to local government. In that sense, there is a self-fulfilling element in the analysis which criticises local government as being short of talent.

Finally, and very close to home, there is Parliament, the one institution that has so far remained almost untouched by the wave of managerial change. That is not just because of the difficulty of making any changes here without all-party consent. It is also because it suits Ministers to have a House of Commons that was designed for a system of government quite different from the system now emerging.

A time-hallowed phrase has it that our role in the House is to hold the Government to account. In reality, we are hardly equipped to secure the kind of accountability required by modern government. Our historical role, which was expressed cogently by the right hon. Member for Gorton, has been to represent constituents, voice grievances, vote supply and sustain the Government of the day. The trouble is that, today, that role is not enough. Perhaps this debate is an effective illustration of that proposition.

If Parliament is to hold modern government to account, it will require a much more professional structure in which power will inevitably be more widely diffused than it is today. For example, we shall need to think in terms of the constitution of powerful Committees, embracing the functions of present Select and Standing Committees and enabling their members to be real partners in government with the Executive.

The Opposition have done a service to the House by raising this important issue. I just wish that they had presented the case at the level which the issue deserves.

7.2 pm

Mr. Alan Williams (Swansea, West)

I congratulate the hon. Member for Wantage (Mr. Jackson) on a thoughtful speech. It was a helpful contribution to the debate.

Before the Minister leaves, may I quickly take up the point that he made? I shall not go down the spoils system route. He referred to the "dismissal" of the noble Baroness Macleod. His information is only partially correct. When I was Minister responsible for consumer affairs in 1974–76, I reappointed the noble Baroness as chairperson, to use modern parlance, of a consumer organisation because she had done a good job and I felt that, at that stage, consumerism needed a consensus approach. I also reappointed the now noble Lord On-Ewing as chairman of the Metrication Board. I am not sure whether he regarded that as a kindness, but when we meet he is, at least, still friendly and we still hold conversations.

As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, one makes appointments from one's own side; but also, if one respects the rights of the Opposition, one also makes appointments from the other side.

Mr. Waldegrave

I agree with that and I am happy to pay tribute to the right hon. Gentleman for having partly righted the wrong done to the noble Baroness in the first instance when she was rather abruptly fired from her first consumer position.

Mr. Williams

I reappointed her because she had done well the first time. So she had a second tour of duty. I do not wish to make a major issue of this matter, but someone has given the Minister inaccurate information.

On the points raised by the hon. Member for Wantage—I am sorry that my referring to them ties him to the Bench for a little longer when he could be enjoying a meal outside—it is salutary to reflect that, like my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), I am in my thirtieth year in the House of Commons. It dawned on me only earlier today that I have spent half that time under this Administration, since they came to office in 1979. Many changes have taken place over the 30 years and many have taken place over the past 15.

This is a good opportunity for us to pause and review the changes, both structural and, more importantly, in the attitudes of those exercising power in the past 15 years, and to consider whether, ultimately, the citizen is worse or better governed. Even more important, we should consider whether citizens' rights under the rule of law have been enhanced or diminished.

May I begin with the simpler of the two issues: the structural changes already mentioned by several hon. Members. We have seen the emergence of "satellite" government. A series of organisations are now in orbit at different distances from Whitehall. First, we have the "next steps" agencies, which I call the "first step" agencies as they have been set up for hiving off at the appropriate time. Those agencies are the nearest to earth in an accountability sense. Secondly, we have the quangos. Thirdly, we have the services that have been contractorised or even privatised.

It is worrying to reflect that in Wales, for example, once the reforms now going through another place are implemented, more appointed members on boards of quangos will administer £2.1 billion than elected councillors who will administer £2.5 billion. It is important to recognise the intimate range of services involved in those hived-off organisations. The health service has a pyramid structure of quangos, with the national health service execituve, the national health service supplies executive, regional executives, district authorities and trusts. It is increasingly remote, in terms of accountability, from the people it is supposed to serve.

The same applies to housing. No one can pretend that housing associations are accountable. As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, the emergence of agencies has made the job of Members of Parliament more difficult and constituents' cases harder to press.

When we discuss the question of diminished accountability and the diminished powers of this House, as others have rightly said, it means a diminution not in hon. Members' egos—much as that may matter to some hon. Members—but in our ability to represent and press the cases of those whom we, in turn, represent via the ballot box.

Mr. Hall

Is not the other side of that coin the fact that the Government are then less accountable, and can be held less accountable by Members of Parliament on behalf of their constituents?

Mr. Williams

Yes, that is so. Ministers have created an armour-plating between them and the House. Ft is significant that three of my hon. Friends hoping to participate in the debate and the hon. Member for Wantage were all on the Public Accounts Committee because the important point about the proliferation of those satellites is that the power to audit and control taxpayers' money is being diminished. It is not only Members of Parliament who say that but the Comptroller and Auditor General and the National Audit Office. They are worried about the problems presented to them and the proliferation of accounting and auditing problems. Between a quarter and a fifth of total public expenditure is being exercised and controlled by unelected individuals.

I have made a point that attitudes matter even more. Something that we rarely think about is worth bearing in mind: what is the effect of these changes on people who—whether hon. Members think they should or should not have done so—have committed their lives and their careers to the public service? The civil service, which many hon. Members resent, used to be a lifetime service. Its security for the individual was also security for the public, in that people did not have to worry about political pressures.

What is the cumulative effect on a full-time civil servant—in the Driver and Vehicle Licensing Agency, for example—who sees get-rich-quick business men poised to take over the contracts for the work that he and his colleagues have been doing over the years? What is the effect on such a person of the sell-off of public assets at knock-down prices? What is the effect of his seeing his colleagues in the "next steps" agencies—one third of a million civil servants—fearful for their future employment and driven to considering buy-out, sometimes in circumstances that have given rise to considerable concern among those of us who are members of the Public Accounts Committee, as in the case of the ex-chief executive of Forward Catering, who, without notifying the Treasury that he had set up a private company, was busy organising the purchase of the operation of which he was chief executive?

What is the effect on public servants when they hear the public ethic derided, diminished and regarded as second-rate by comparison with the market ethic and the make-a-quick-buck philosophy? What is the effect on the person who entered the public service many years ago, regarding it as his career, of the news that the Government are now thinking in terms of short-term contracts?

The public servant is bound to question the basic—if I may use the word "basic" without being accused of being snobbish—public ethical standards in which he was trained and by which his activity has been guided over the years. It is therefore not surprising that the Public Accounts Committee, for the first time ever—this is the additional importance of the Committee's devastating unanimous report—recognised that the new situation has created the circumstances for sleaze or corruption or simply for the diminution of standards that we should be, and in the past have been, able to take for granted.

The Chancellor of the Duchy of Lancaster mentioned the health service quangos. I should like, in passing, to make the point that they are a long way from being the virtuous organisations that he thinks they are. We have pointed out that Sir Duncan Nicholl, a retiring chief executive, is the Sylvester Stallone of Whitehall in that he has appeared before the Public Accounts Committee in so many repetitions of the same story. At the end of it all we were told that a letter of reprimand had been sent. One can imagine members of quangos shivering in their shoes when the postman arrives lest he be carrying a letter from Sir Duncan saying, "You have been a naughty boy; do not do it again."

It is a rather sad joke to find that Sir Robin Buchanan, ex-chairman of the Wessex health authority, who gave to the Secretary of State who appointed him an assurance that he would introduce penalty clauses into a contract that went wrong, told the authority's solicitor that penalty clauses were not to be included. Far from getting one of Sir Duncan's little buff envelopes, Robin Buchanan received a knighthood and was promoted and put in charge of the multi-billion-pound national health service supplies executive.

As has been said, there are institutional ways of addressing this problem. We may well have to think in terms of new sanctions, such as those that exist in the field of local government—surcharging or debarring from public office—as an extra weapon in the armoury of those who monitor these organisations.

However, I do not want to go into too much technical detail at this stage. I want, instead, to move to an aspect of the unelected state that has not been considered so far today. To my mind, this is in some ways the most serious development of the 30 years during which I have been a Member of Parliament. I refer to the unconscious, unintended politicisation of the civil service that has inevitably taken place through the erosive persistence, for 15 years, of the unchallenged "one of us" philosophy. Inevitably, as I hope to demonstrate, that has led to politicisation.

A couple of weeks ago the Public Accounts Committee heard from Sir Tim Lankester on the question of Pergau. Sir Tim's evidence was a breath of fresh air. It was almost like the last charge of the old brigade of the civil service. Here was a civil servant imbued with the old attitudes of the public service, willing to put his career on the line and to say to the Prime Minister and the Foreign Secretary that he, as a civil servant, was not willing to make payments out of the aid budget unless they gave him a written direction as he considered that that would be an abuse. I wish that more civil servants had that sort of courage.

Alas, more are like the one from whom we heard at the very next sitting, when we were dealing with the Insolvency Service. We were told that 50 per cent. of directors of private companies whom the service thinks should be disqualified in the public interest are not disqualified as there is a shortage of manpower for the purpose of processing disqualifications. The official was asked whether he had requested more manpower, and he replied that only a small number had been asked for. When he was asked why only a small number had been requested, he said that he knew that he would not get more. I asked him if he did not see that, in a way, he was making the decision for the Minister, by whom decisions about the level of manpower needed to carry out the statutory duties laid by the House of Commons on his organisation should be made. I put it to him that it was not for him to presume that the Minister would turn down his request, saying that if manpower were not provided the Minister would clearly be responsible.

The final and shattering answer was received when I asked him what calculation he had made if he did not ask for the manpower that he needed. He again said that he had not even made a calculation: it was pointless because he knew what the Minister would say. This is what I mean by politicisation: civil servants begin to think as Ministers think.

I am sorry to become anecdotal, but when I was at the Department of Industry I saw an under-secretary in the outer office to my office and I asked my private secretary what he was doing there and whether he wanted to see me. He replied that he did not want to see me, but wanted a steer on my thinking on a subject. I told my private secretary to tell him that he would not get a steer and that I did not want him to ask that question again because he was paid to give me his best advice while I, as a Minister, was paid to decide whether to accept it. Many of the problems caused by the ill-thought-out legislation that we are having to deal with in the House may have arisen because, after 15 years, civil servants are thinking as they think that their Ministers will think.

I do not claim that my approach involved great virtue—it was motivated by self-interest. As Ministers are finding out, it is far better to find out that they have got it wrong in the privacy of their office than when they are standing at the Dispatch Box or dealing with rebellions in the other place. People who understand the system and who have not been consulted are exercising their power to take action.

I am not being disparaging, but some hon. Members, especially those who have formed the new intake and have never been in opposition, may ask whether it really matters to the public if civil servants identify too closely with the policies and philosophy of their political masters—I hope that hon. Members will excuse the phrase. Of course it matters if citizens' rights suffer to any degree as a result.

We are learning the most profound lessons from the Scott inquiry. It is shattering that three of the most senior civil servants in the land could have met to conspire to withhold from the defence counsel evidence that could have proved the innocence of those on trial.

I was disgusted to read a report in The Guardian on 18 December. I shall not name the official featured in that report as it would be unfair to single him out—not that I have that much regard for what he did. The article states: A senior Whitehall official yesterday admitted he misled the jury in the Matrix Churchill arms-for-Iraq trial on three issues crucial to the defence. I shall not go into those names—I want to deal with why he took such action. The report continues: The inquiry heard that before the committal proceedings in November 1991"— Mr. X— told his colleagues that he would 'do my very best to avoid embarrassment' to ministers and civil servants. What about the people in the dock? Is not it appalling that officials are so committed to defending Ministers that they are willing to see innocent people go to prison?

When hon. Members talk about corruption, they tend to talk about financial corruption, but there are worse forms. Corruption of parliamentary accountability means corruption of the democratic process, and corruption of the rule of law means corruption of the rights and freedoms of citizens of this country. The work of the Public Accounts Committee and of the Scott inquiry has shown that a rot has set in throughout the system in the past 15 years, along the stepping stones of events surrounding the Cementation, Westland, Spycatcher and Iraq affairs and arms-for-aid deals. Ministers have so eroded standards that even civil servants decide not what is right and what is wrong, but what is politically convenient and what might be politically embarrassing.

7.25 pm
Sir Teddy Taylor (Southend, East)

We should all be grateful to the hon. Member for Oldham, West (Mr. Meacher) for letting us debate the unelected state because there is much to discuss on that subject. I hope that the debate will encourage the Government to review some of their exciting, wonderful and stimulating policies and to consider whether they have created dilemmas of democracy. As time is short, I shall mention one example of that that has arisen in Southend-on-Sea.

One of the reasons that I moved to Southend-on-Sea was that it had a splendid education system. All my children have gone to the excellent council schools there. Due to all sorts of problems in Essex, some Liberal Democrats and some Labour party members were elected to the council. Although their views are not nearly as extreme as those of the European People's party, we were worried that their election might threaten our great grammar schools.

The region that I represent is the only part of the United Kingdom where 25 per cent. of the senior schools are grammar schools; four schools take a quarter of the pupils in the region.

As you probably know, Madam Deputy Speaker, because of the election of the Liberal Democrats, we thought that something had to be done. I notice that the Whips are interested—as always—in what we have to say. For that reason, we were presented with the grant-maintained schools option, which seemed wonderful. It was explained to parents that if they went for the grant-maintained option, they would be in charge, the people would have power, and those nasty bureaucrats in Chelmsford would not be able to do anything nasty.

Although my wife and I sensibly voted no to the grant-maintained option because our daughter attended one of the schools involved, the majority voted yes and thought it was wonderful. The option won huge majorities.

Within six months, the boards of the four schools proposed an exciting plan, which they thought was wonderful, to do away with the 25 per cent. of grammar schools. They proposed to make them the schools for Castlepoint and Rochford instead of for Southend. Instead of being broadly based schools, they would become elitist schools, presumably with better results, which would be massively damaging to the able, working-class children in Southend-on-Sea.

Parents went to meetings a week last Monday. My wife attended one of them and she said that the vote appeared to be 99.6 per cent. against. Everyone was against except one poor lady from Rochford who said that she wanted her daughter to go to the school. After the meeting and comparable meetings at other schools, it was explained that parents were entitled only to consultation. Even though the parents voted 99.6 per cent. against, it did not mean that the proposal would not go ahead.

The boards are going ahead with their proposal and are presenting their plan to the Secretary of State for Education, who will decide. Although the decision has not yet been reached, that is one simple example of why we should be careful before surrendering democratic control. I am sure that hon. Members will know of many other cases where people have been misled and conned into thinking that they are in control when they are not at all; all they have is the right to be consulted. Consultation, in many cases, gives them no real power.

Due to my age, I rarely feel angry enough to want to punch people, but having heard some of the arguments today, I have come near to it. I want to describe my experience in Southend during the past week.

Some people have been talking about fighting for democracy and fighting to save people's powers. However, they are the same twits who voted to pass over most of the power which was controlled by Parliament when I was first elected 30 years ago, at the same time as the right hon. Member for Swansea, West (Mr. Williams). I shall give the House some examples of how that affects people. I hope that my hon. Friends will listen as it is a great advertisement for Maastricht.

Last Friday, I had the pleasure of visiting a Southend firm called PMS which imports toys from a place called China, which is a big country besides Japan. It has done that for 21 years. It employs 200 people in Southend-on-Sea. Many of them are my friends. They send their kids to the same schools and do their shopping at the same place as I do. Last year, the firm made a huge profit of well over £1 million. It helped the Government by exporting £10 million worth of goods. Things were going splendidly and last year it made a big expansion. It was one of the few firms in Southend doing well and providing good jobs. So what happened?

Last Friday, when I went to see the firm, the directors, the staff and the workers were shellshocked. They had received news from London that they had to reduce their business by 50 per cent. because the EC, with the help of all the Employment Ministers who work for democracy and freedom, had passed a resolution that all firms importing Chinese toys would have to reduce their imports to 79 per cent. of the 1992 figures.

The motion refers to the unelected state. As the firm expanded last year, it has to cut its business to 50 per cent. Basically, the firm now has no future. I phoned up our friends in the Foreign Office and said, "What has happened?" They said, "We are terribly sorry. We voted against it, but it still went through. You cannot count on 50 per cent. because of the GATT rule."

The decision will be taken not by the Government but by the Commission that was elected by nobody. It is part of the unelected state. What do I say to them? I can do nothing at all. What can Parliament do? Even if the Prime Minister, the Leader of the Opposition, the Liberal Democrats, the Welsh nationalists and everybody else votes against it, it still continues.

The firm was dealt with wholly unjustly, but there is nothing it can do. The unelected state has taken over and the people's rights have disappeared.

If something is wrong, foolish, lunatic, negative or does no good to anyone at all, we in Parliament should be able to do something about it. However, because of the treaties we have passed we can do nothing. That firm and those workers, who have worked hard to build up a super organisation, have to wait for what the Commissioner tells them. The unelected state has taken over.

The day before, I had the pleasure of visiting a firm called MK Electric in Souhtend-on-Sea, another group that employs many people and is doing well. The staff there told me that they were paralysed with fear about the Euro plug. Ministers had said that the idea was bogus and concerned only an industrial organisation that had nothing to do with the EC. I found out that that was a load of codswallop. Basically, CENELEC—the European Committee for Electrotechnical Standarisation—produced a report of which I have a copy. It says that a move towards a Euro plug would be dangerous, costly nonsense. It passed that decision to the Commission, but the Commission said, "We are going to have it. If you do not do it, and we shall give you funds for it, we shall do it ourselves."

As that is true, MK Electric will have to change all its equipment when the French have it already and every householder in Britain will have to spend an extra £1,000 on plugs, sockets and wiring systems. It will also be dangerous, because the Royal Society for the Prevention of Accidents has told us that, unfortunately, because the Euro plug does not have a fuse, more houses will be set on fire.

What can we do about it? A nice Minister for Industry wrote to me last week saying that the measure will go through under article 103A, which means a majority vote. The Brits and the Germans are against and it seems that the balance is held by the Belgians.

What can we do about it? What about the firm in my constituency? It is a great employer; they are great people doing great work. What can I say? What can the Minister of Employment do? Nothing at all. We have to wait and see. Democracy is largely dead.

Southend-on-Sea has 14.5 per cent. unemployment. All kinds of reasons have been given for that—perhaps it is their rotten Member of Parliament. The Government kindly said that they wanted to make Southend an assisted area. I am not quite sure what that is and I am sure that it is a bad thing in principle, but they said that they would give us money. I said, "Isn't that nice?" I do not like subsidies, but if they are going round, we should try to get some. They then said, "We are sorry, it is just a formality, but we have to send the application through to Brussels, to a Mr. van Miert." I do not know who he is. I sent him 'a Christmas card, but I did not get a reply.

Unfortunately, before he looked at the list of 24 per cent. of the working population of Britain he decided to cut off 2 per cent., so instead of 24 per cent. it was 22 per cent. and, sadly, Southend-on-Sea was in the other 2 per cent.

Mr. Jacques Arnold (Gravesham)

And Gravesham.

Sir Teddy Taylor

He did not say, "Which are the nice places?" He simply decided to cut off 2 per cent. and when I contested the decision, I was told that I should not complain because they cut the Germans by 3 per cent.

Mr. Arnold

It was not Mr. van Miert; it was Bruce Milian who used to sit on the Opposition Benches. He jolly well should have known better.

Sir Teddy Taylor

My hon. Friend is absolutely wrong. I was talking about assisted area status. Mr. Millan dealt with the second problem. My hon. Friend is so anxious to fight for his constituency that he forgets that Mr. van Miert dealt with the assisted area application. The next application was for European funding and that went to Mr. Milian who refused Southend because he wanted to give more to Greater London.

What has happened to our elected democracy? There is no Commitee to go to, no Parliament and no Ministers. I cannot write or appeal to anyone because basically, one bloke decides. It is terrible. When blokes decide we get the same things—the fiddles, the frauds and the rest.

I went through my mail this morning. You, Madam Deputy Speaker, probably have done more than anyone to fight for the rights of animals. We all know that Madam Deputy Speaker is a great lady—she has a heart. I received five letters this morning from people saying, "I saw the television programme. What are you going to do about this horrible export of animals?" I have to say that we can do nothing. It is a horrible thing; the most filthy cruel thing in the world. Animals are treated disgracefully, but there is nothing we can do. Even if the Prime Minister, the Leader of the Opposition and all Members of Parliament want to do something, we cannot unless we go to the Commission and ask for a Euro law to enable member states to ban live exports. We are kidding ourselves.

At Question Time we say that we want inquiries and reviews, but we are kidding ourselves. Democracy has largely died. I would not mind if the decisions had gone somewhere else democratic, but they have gone to people, councils and boards totally outside our control.

Having been in the House for 30 years, I know that there is nothing worse than a person with power who is not answerable to the people. The strength of democracy is the right to get people out, to get rid of rotten Governments, rotten Oppositions and rotten Members of Parliament and to say that we are fed up to the teeth, but in the next election people will have great difficulty in deciding on what to vote for.

I am glad Labour has raised the issue. I hope that people will think about it and stop kidding themselves. If they have any doubts at all, those who voted for the treaties should go to PMS on Arterial road, Southend and tell the firm what to do now because I do not know what to say. It is a great tragedy. The firm has worked wonderfully; the staff have produced jobs and profits. Now they are being kicked in the teeth by a stupid nonsense and tragically there is nothing we can do.

7.38 pm
Mr. Mike Hall (Warrington, South)

I shall echo some of what the hon. Member for Southend, East (Sir T. Taylor) said. We all agree with the principle that when Government go wrong, the electorate can turn them out of office. That is one of the fundamental reasons why we are debating the unelected state this evening. It is an important debate as it goes to the heart of how we govern the country.

The existence of the unelected state challenges Britain's claim that it is a parliamentary democracy. I hope that, if nothing else, the debate will allow the Government to reflect on that issue and that it will bring the Government back to a more accountable position; the Labour party will then have achieved something. I am not optimistic that that will happen, because the 15 years of Conservative Government are characterised by three things. First, the Tory party philosophy and the Government's policy is the feverish accumulation of wealth in private hands. Secondly, there is the accumulation of power at the centre. The Government do not like anyone else to have the power; they want it all for themselves. I will develop that point later on. Thirdly, they impose their way of thinking on every walk of life in this country. We now see the arrogant use of power. The main purpose of the Tory Government is to govern, to bring about a situation where they stay in government. They want to preserve their hegemony and use every instrument of Government to achieve it.

The overwhelming theme of Tory rule has been power without accountability. That brings me to a point made by the hon. Member for Spelthorne (Mr. Wilshire), who is not in his place at the moment. He said that one could not divide power and accountability. That is what the Government have tried to do in a whole range of things. The hon. Member for Southend, East talked about the democratic principle, where power is exercised. If the communities that local authorities serve do not like what is being done in their name, they have the power at elections to change that. That is a fundamental criticism of power without accountability. It is a corrupting influence on the processes and institutions of Government and that is why the Government have gone about trying to demolish some of our democratic institutions. With the money that they have spent on quangos and the unelected state, they have created a monster. That is the hallmark of the Government.

Where the Government meet resistance to their way of thinking, they attempt to impose their way of life on the country by doing one of two things. They either abolish it or circumvent it. That is positive proof that there is an undemocratic element in Government. We have only to look at the abolition of the Greater London council. It had the nerve to oppose the Government on a number of issues. The Government could not beat it at the ballot box, so they abolished it. They ran into the same argument with the metropolitan counties, which voted Labour after they were initially controlled by the Tory party. It was obvious to the Government that they would not win them back, so they abolished them.

In other areas the Government will circumvent the provisions of local democracy through the creation of quangos and a range of agencies. We have seen the incorporation of governing bodies, sixth form colleges and colleges of higher education. The Government have taken them out of accountability to their local education authorities. That is one way in which they circumvent the resistance that they meet in the nation. As a result, much of our public service is funded by public money, but is provided by unaccountable agencies, quangos and, in some cases, privatised companies. The debate is about accountability. To whom are those organisations accountable? That is an interesting question and I hope that the Minister will respond.

We can look at all areas of public service. On education, the Funding Agency for Schools takes away democratic responsibilities from locally elected education authorities. I have already mentioned incorporated colleges. What about the role of the Centre for Grant-maintained Schools? According to a confidential report to the Public Accounts Committee—it has not been published—the centre was on the verge of using public money to fund an organisation that is involved in political activity. The report makes, great criticisms of what happened. The PAC was able to say publicly that, part way through the accounting year 1992, it could not say that the money given to the Centre for Grant-maintained Schools was being used for the purposes for which it was voted.

The Minister mentioned how much money was being spent on the Housing Corporation. The Housing Corporation is accountable to Government. It funds housing associations, which are accountable to the Housing Corporation. Those housing associations are not accountable to the communities where they provide houses. The Chancellor of the Duchy of Lancaster then said that the Government have put much more money into that organisation. That may have been true, because in 1992–93, £3.4 billion was made available for the Housing Corporation to dispose on public housing. In the next three years, only £5.4 billion will be provided to the Housing Corporation. That is £1.8 billion per annum, which represents a cut of £1.6 billion. He held that up as a good example of why such an approach for the agencies is a good thing.

We can also talk about social services, care in the community and the Benefits Agency. No hon. Member in the House this evening was not horrified at the incompetence of the Benefits Agency in dealing with the complaints of people who applied for the disability living allowance.

There are environmental problems with the National Rivers Authority. It is another organisation that Is not accountable to the communities that it serves, but is partially accountable to the Minister who provides it with money. Given the high level of unemployment, the huge level of youth unemployment and the need for proper skills in our community, training is an important issue. It is now provided by training and enterprise councils. I shall deal with their make-up in detail.

The Minister told the House that there has been some improvement in the management of the health service. We shall have to wait and see, but the report that was produced by the King's Fund puts a question mark over the so-called Government reforms. I shall make a constituency point, because it relates to appointments to public bodies. When the Secretary of State for Health announced that the Government were to merge the Merseyside regional health authority and the North West regional health authority, I wrote to her in December and asked how the appointment to the chair of that authority would be made, because I would have liked to have made some of my views known.

I received a letter in the middle of January saying that the Secretary of State was about to make the appointment and would be interested to receive my views. Three days later, it was announced that Sir Donald Wilson, chair of the Mersey regional health authority, had been appointed to the post of chair of the newly created North West regional health authority. I was given three days to let the Secretary of State know, but it was quite obvious that she had made up her mind before then. It is no coincidence that Sir Donald Wilson is a well-known Tory in the city of Chester. He may do a good job, but we were not given the opportunity to suggest any other names.

That brings me to the point about public service. It is no longer accountable to the communities. It is characterised by membership. Membership of most of those bodies is largely determined by the Government. As we heard from my hon. Friend the Member for Oldham, West (Mr. Meacher) and other hon. Members, statistically that can be shown to be down to political patronage. Tory placemen and women are staffing quangos, agencies and other organisations that deliver public services. That is bad, but there is another layer on top that makes it even worse. In some organisations, such as the training and enterprise councils, and other independent organisations, the governors are not appointed by Government; they are self-perpetuating. They appoint their own members to their own boards. There is not even the accountability of the Government being able to tell the Warrington Collegiate Institute, "We think that you are doing a pretty bad job. We should replace some of your governing bodies." They do not have that power. Nor do they have the power to do that in relation to the TECs.

The Warrington Collegiate Institute is the new name for what used to be called the North Cheshire college. On incorporation, the North Cheshire college governors kicked its staff and student representatives off the governing body, on which they had been represented since it was Padgate college of education and then Padgate college of higher education. That was a retrograde step.

The institute has run into great problems. Not only has it had to sack one principal—to be absolutely accurate, one principal left under a cloud—but that principal's replacement left under a cloud shortly afterwards. There was uproar in the town about the way in which the college was being managed; the community of Warrington demanded action from the institute's governing body. A staff representative and a student representative have now been appointed to that body again—but only because the community of Warrington did not accept the way in which the Government had removed accountability and demanded at least some community involvement in the governing body.

The real problem with self-perpetuating governing bodies is that they can create a climate of nepotism. There is great fear about that climate of corruption. The Public Accounts Committee report published on 17 January raises a question mark over glaring examples of fraud, corruption, incompetence and sleaze. The report—with which the Government have dealt only in part, in a very offhand way—catalogues a catastrophic number of examples of waste and improper spending.

The opening paragraph of the report—entitled "The Proper Conduct of Public Business"—states: In recent years we have seen and reported on a number of serious failures in administrative and financial systems and controls within departments and other public bodies, which have led to money being wasted or otherwise improperly spent. These failings represent a departure from the standards of public conduct which have mainly been established during the past 140 years. That is powerful criticism. It is not surprising that the PAC is able to make such criticism, given what is said about the Foreign and Commonwealth Office on page viii of the report: The Department's accounting arrangements were open to strong criticism, and inadequate controls created a climate which was conducive to fraud and theft, and may have heightened the risk of irregularities remaining undetected. That is what the Public Accounts Committee said, passing judgment on the spending of public money. The Government must look at the matter again: it is not sufficient for the Prime Minister to respond in the way that he has.

According to written answers in Hansard, in the current year the training and enterprise councils will receive £1.8 billion of taxpayers' money from the Government. The PAC reported that, between 1989 and 1991, the Government had incorrectly paid the TECs £79.5 million. The Department of Transport, however, was not happy merely to provide them with £79.5 million to which they were not entitled; between 1990 and 1993, it also provided them with £48 million worth of computers, which did not work at all, for the information technology field system.

Mr. Riddick

I assume that the hon. Gentleman means the Department of Employment, rather than the Department of Transport.

Mr. Hall

I was expecting a much more interesting intervention from the hon. Gentleman, in view of his earlier performance. However, he is absolutely right. It was the Department of Employment.

Mr. Fabricant

Say thank you, then.

Mr. Hall

If the hon. Member for Mid-Staffordshire (Mr. Fabricant) wants to intervene as well, I shall willingly give way to him, given the quality of his earlier intervention. I note that he remains seated. If he wants to interrupt from a sedentary position, Madam Deputy Speaker, I am sure that you will deal with him in your usual manner. [Interruption.] I know that the hon. Gentleman was trying to be helpful.

Madam Deputy Speaker (Dame Janet Fookes)

Order. I allow a few seated interventions—with reluctance—but I certainly will not allow general conversation across the Chamber.

Mr. Hall

Thank you, Madam Deputy Speaker.

Yesterday, the PAC heard evidence from the Welsh Office about the way in which it was dealing with TECs in Wales. There are only seven, but they have received over £130 million. In 1992–93, they were overpaid by £5.96 million for services—that is, the Welsh Office said to the TECs, "You provide training, and we will pay you the money."

Only about £200,000 has been recovered. The Welsh Office had to write to the TECs, demanding that they improve the organisation of their finances, for which they called on the public purse. The senior accounting officer in the Welsh Office wrote three strong letters, all of which were ignored. He then contacted the TECs, saying, "If you do not fall into line, I will fine you." In the end, a wonderful fine of between £600 and £1,000 was meted out.

Even that did not work, however. The Welsh Office then had to say that, unless the three main culprits got their act together, they would be breached—in other words, those seeking training in Wales would have to go to a different organisation. That is just one example of the way in which TECs—which are not even a non-departmental public body—resist accountability to the Welsh Office, which is said to be the route of accountability to Parliament.

Mr. Hanson

While my hon. Friend is on the subject of TECs in Wales, he may be interested to know that 34 of the people who sit on their boards also sit on other Welsh quangos. It is part of the general multiplicity of quango appointments. What is true of TECs is also true of other non-departmental public bodies in Wales.

Mr. Hall

My hon. Friend has made a valid point about the membership of the TECs. They have become self-fulfilling bodies—accountable to whom? They resist accountability to Government and they do not seem to be very accountable to those on the training schemes. Where is the accountability, in a large area of public provision? They have also resisted the appointment of elected representatives to their boards—and by "elected representatives" I mean local councillors. That is a good example of why the unelected state is failing to meet public needs.

The PAC report makes a number of further points. I shall not go into the details, as most have already been referred to. The report gives 26 examples of failure to meet proper standards of probity in Government. Wessex regional health authority wasted £20 million on introducing the regional information system, which has already been mentioned. What has not been mentioned is the National Rivers Authority—a body which, along with its chairman, is appointed by the Government. The NRA mismanaged its headquarters relocation project, which, according to the PAC, was characterised by inadequate and poorly controlled tendering and contract arrangements, with the attendant risks of fraud, corruption and failure to gain value for money. A total of £1 million of public money was wasted.

In 1992–93, the NRA received £113.6 million from the Government; from the people whom it serves, it has collected £348 million in receipts. The Property Services Agency has cost the taxpayer £65.6 million and could not collect the money that it was owed from its customers. We have already heard about the Welsh Development Agency, which has received a Government grant of some £171 million. Its international director spent nine weeks in work and received £228,000 in payment. That is clearly not the right way in which to do business, or to inspire hope that there is some accountability in the system.

The director of regionally managed services of West Midlands regional health authority was made redundant. As has been said, he should have been sacked, and not paid a £81,837 lump sum and £6,462 in redundancy money. The health authority wasted £10 million that should have been spent on health care. Wessex regional health authority, working with Wessex Integrated Systems Ltd., cost the taxpayer between £500,000 and £1 million by introducing an over-priced computer system.

The PAC also refers to the Telford and Warrington development corporations. They made their staff redundant and paid them £6.6 million; the staff were then taken on as private companies in the same offices, doing the same jobs for the development corporations. There is a catalogue of abuse of public funds.

When my right hon. and learned Friend the Leader of the Opposition raised that question with the Prime Minister at Question Time on 27 January, the Prime Minister said that he welcomed the report issued by the PAC today"—[Official Report, 27 January 1994; Vol. 236, c. 414.] because it provided a useful checklist. He went on to say that it supported the Government's "drive for efficiency." If that is how the Prime Minister receives that highly critical report, which demonstrates 26 ways in which the use of public funds and the proper conduct of public business have sunk to a low point after 140 years, it begs the question, will the Government take the Public Accounts Committee report seriously?

This is an important debate because we need to reverse the trends away from quangos and agencies to accountable government. We must return to local government the powers and finances that they need to deliver the services for which they have been responsible before and for which they should be made responsible again.

Most importantly, there should be a balance in the appointments to public organisations. When I first became involved in local politics in Warrington, Jim Mason was the chairman of Warrington development corporation. Jim Mason was clearly a Labour party activist; there is no doubt about that. His connections with the Labour party are renowned. The deputy chairman was Councillor John Walsh, the leader of Warrington borough council, which was a Conservative-controlled council at that time. Peter Shore insisted on having political balance in Warrington development corporation and that is a lesson that the Government should learn.

Perhaps one way to deal with the problem would be to ensure that all public appointments made by Government are scrutinised by a Select Committee which makes the decisions or recommendations to Government. That would ensure that decisions were transparent and above board and that we restored accountability.

In 1944, Reinhold Neibuhr wrote a book called "The Children of Light and Children of Darkness." At the time it was obvious that the war was coming to an end and that we were going to defeat the fascist Nazis in Germany. He tried to write a thesis on preparing the new western world for democracy. He said: Man's capacity for justice makes democracy possible, but man's inclination to injustice makes democracy necessary. That is true today.

8.1 pm

Mr. Jacques Arnold (Gravesham)

I am grateful to the Opposition for allowing us the opportunity to have this important debate. The motion is interesting. It condemns … the use of contractors to provide public services; notes that these organisations are not publicly accountable to elected representatives; is concerned that their proliferation has been accompanied by a loss in the quality of public services, by increased fraud and waste, and by falling standards in public life". Those are serious accusations and we had many insinuations of corruption from the hon. Member for Oldham, West (Mr. Meacher), who opened the debate for the Opposition, but where is the evidence? We should consider that accusation in the context of some cases, and those cases should be brought forward and analysed against each accusation made in the motion.

My attention was brought to one such case by the 13 January 1994 edition of the Radio 4 programme "Face the Facts". That programme referred to a contract that the Labour-controled Tameside borough council near Manchester made with Tameside Enterprises Limited to privatise its old people's homes. The Labour motion before us condemns the use of contractors to provide public services, but that is a Labour-controlled council which has done exactly that.

What is Tameside Enterprises Limited, or TEL for short? Let us look at its shareholders. First, the Labour-controlled Tameside metropolitan borough council; secondly, Ashton-upon-Lyne constituency Labour party—very interesting, that one—thirdly, the Thameside community care trust, the majority shareholder. That sounds better, but who are the trustees of that trust? They include two Labour Members of Parliament and a Labour Member of the European Parliament. I should like to know who are the other trustees. Do they also have political views in common?

The set-up was best described by a member of staff speaking on the radio programme: Well, to be quite honest, I … I thought I was working for the Labour Party, basically. The directors always seemed to be somebody from the Labour Party. There seemed to be jobs created for … it was always somebody's wife or somebody's daughter or an ex councillor who lost his seat. And it just seemed that anybody you met was either involved in the Labour Party or a relation of somebody. Who did run TEL? The answer was given by the programme presenter, John Waite. He said: At the top of the heap, as the fifty five thousand pounds a year company secretary and sole executive director, was Mr. Paul Stonier, a former Labour Parliamentary candidate whose wife was chair of the Labour-controlled borough's Social Services committee. His number two was local Labour councillor, Simon Walker. Neither man had any significant business experience. Both had a wealth of party connections. Too many, according to a Labour Councillor Craig Brodie. Then, on the programme, Councillor Brodie was quoted as follows: Paul Stonier was a former director of Policy Services at Tameside Council and had no financial qualifications at all. Let us remember that we are speaking about the chief executive of quite a major company. He continued: Councillor Simon Walker was appointed from a short list of one. There was the chairman of the company and he was also the chairman of the Strategy committee of Tameside Council. One councillor's wife … and daughter received jobs in TEL. Basically, it was a family affair. Let us remember that those are the words of Labour Councillor Brodie.

Mr. Waite went on to state: Links between the council and the company were further strengthened by the appointment of council leader, Roy Oldham, as the director of a subsidiary of TEL set up to oversee property projects. Let us return to another accusation in the Opposition motion, about increased fraud and waste, and … falling standards in public life". Let us judge that case on those criteria. The House will remember that the executive director was appointed on a salary of £55,000. Within two years he was on £80,000 a year and a flash sports car, but that was not enough. John Waite, in the programme, told listeners: Mr. Stonier and his number two, Councillor Walker, had awarded themselves unauthorised pay rises of a thousand pounds a month, twelve thousand pounds a year each, after TEL had won a contract to manage homes for —wait for it—Labour-controlled Stockport Council. Both men had also used the company credit card to finance personal spending, for which they later repaid the company. In particular, Mr. Walker put the plastic to work buying a holiday abroad just a week after the cuts package —which I shall mention later— was introduced in the borough's old people's homes. Mr. Stonier had also arranged an unauthorised loan from the company of sixteen thousand pounds, a loan made jointly to himself and his wife, Shirley, then chair of Tameside's Labour-controlled social services committee. What about a waste of money? Let us consider some of the orders contracted. John Waite said: In fact, in just two years, almost half a million pounds went on carpet contracts alone, contracts awarded without tender to a former bankrupt who'd fitted carpets in executive director Paul Stonier's home. The tendering process was also ignored in awarding the contract to run TEL's payroll, with the job going to a firm run by one of Mr. Stonier's Labour party colleagues. How could all that arise? Company law defines the responsibilities of company directors. Where were they, the directors appointed by and representing the shareholders—let us remember, Ashton-under-Lyne Labour party, the Labour-controlled council, or the Labour trustees of the so-called Community care trust? They either did not demand information or exercise control or they failed to assess it.

It seems that that scandal was not confined to the instances that I have outlined; it extended to the overall finances. Bills were not paid, debts were run up to the tune of £2 million, control was non-existent and—worst of all—the welfare of elderly residents was put in jeopardy. When the finances were in a shambles of a scale that even the Labour party could not fail to see, the Labour leaders of the council met.

The meeting consisted of Councillor Oldham—the leader of the council—the deputy leader, the director of finance and Councillor Middleton, chair of the council's debt recovery committee. Councillor Middleton said on the programme: All the three faces were ashen. As though they were waiting for an execution, that sort of thing. And it was the leader himself who said, 'Things are definitely not right with … with Tameside Enterprises, Jim, but the last thing we want is any panic, you know, and eventually it'll work itself out and TEL will … will ride out the storm' sort of thing". Presumably, that is the way in which the Labour party operates, but rumours abounded, and, finally, in May last year, seven Labour councillors from the party's Ashton branch broke ranks to call for a public inquiry and the immediate dismissal of TEL's top management. The response from leader Roy Oldham and the controlling group of Labour-controlled Tameside council was swift and firm—the seven councillors were suspended. That is presumably the way in which the Labour party deals with the accountability to elected representatives for which its motion calls. Perhaps today's debate should be called "The Elected Sacked State".

How did the Labour group in Tameside ride out the storm? First, the board tore up the guaranteed pay and conditions package for the staff which had been negotiated with the National Union of Public Employees. Then, the executive director was sent around the old people's homes in his sleek sports car, sorting out the severe cuts that had been called for. "In a flash sports car around the homes"—does not that have echoes of the right hon. Member for Islwyn (Mr. Kinnock) describing Labour-controlled Liverpool city council?

The key Labour party grandees began to resign from all the boards and committees of the company. Labour Councillor Rolland said: All the key players seemed to be jumping ship because the first determined inquiry was now underway into that company. We really started to wonder whether things weren't far, far worse than we ever feared.

Mr. Hall

The hon. Gentleman referred to a public inquiry. Who instigated it?

Mr. Arnold

A public inquiry is now under way and many other inquiries jolly well should be under way. If a public inquiry was instigated, it was thanks to the BBC, which is, incidentally, a quango, not to the Labour party.

How did the matter end? I call on the Opposition's spokesman who winds up the debate to tell the House what the Labour party headquarters in Walworth road is doing about it. We should like to hear what inquiry the Labour party has established. Perhaps the Minister will tell us whether the district auditor is on to this, what steps are being taken to bring the directors of TEL to book, what the charity commissioners are doing about the trustees—two of whom are Members of Parliament—and whether the fraud squad is looking into the shambles.

Reading the motion leads one to think that people in glasshouses should not throw stones. Instead of tabling what can best be described as a sanctimonious boomerang of a motion, Labour should put its own house in order and clean out its Augean stable.

8.14 pm
Mr. Peter Kilfoyle (Liverpool, Walton)

The hon. Member for Gravesham (Mr. Arnold) should understand at least one thing—the series of incidents that he described bore no resemblance to those that I and my right hon. Friend the Member for Islwyn (Mr. Kinnock) went through in Liverpool. I urge the hon. Gentleman to examine the historical record, which shows that the Labour party put its house in order. Such smears go nowhere.

Mr. Arnold


Mr. Kilfoyle

No, I shall not give way. The hon. Gentleman has made his speech.

I was beguiled by the Chancellor of the Duchy of Lancaster as he meandered in an entranced, Wee Willy Winkle fashion through the motion and the amendment without dealing with the basic difference between the two parties, which is whether or not we believe that there has been a regression to the non-elected state, whether public standards have been eroded or whether, as the Government contend, they have been upheld. I argue that it is certainly not the latter.

I was also quite taken by the comments by the hon. Member for Spelthorne (Mr. Wilshire) who left us spellbound, if nothing else, by his failure to explain exactly what he meant by accountability. He did not speak very succinctly and he certainly did not convince me. More important, he said several times that we were making all sorts of strange assumptions. He also said that he had not had any difficulty in obtaining information. It is a shame that he is not here to hear about my odyssey about trying to obtain information which he apparently obtained with great ease and facility. I believe that the availability of information is vital for accountability but it has not materialised, or certainly not without a great deal of effort.

Every year the Cabinet Office produces a publication called "Public Bodies" which, allegedly, tells us all that we need to know about quangos. The 1993 edition summarises the number of staff employed by each body, its total expenditure, the number of people serving on it and what they receive per meeting or per annum. It even tells us how many men and women there are on each quango. Sadly, it does not answer the crucial questions. It does not tell us who the people are or why they are there.

Incidentally, the publication deals with the recognised bodies that we know as quangos. I digress a little to mention a body that I thought was a quango, the Charity Commission. A number of charity commissioners are listed at the beginning of the publication, but I wondered why the body did not appear in "Public Bodies". I rang the Home Office under whose aegis it apparently operates only to be told that it was not considered a quango because when the people were appointed they became public servants, ergo, it was no longer a quango. I wonder where there is a list of those to whom the people who receive up to £44,000 a year as charity commissioners are accountable.

My hon. Friend the Member for Knowsley, North (Mr. Howarth) tabled a series of questions in 1993 asking various Departments to list the names, occupations and current employers of people who held positions in each public body. In most cases he was referred back to "Public Bodies" or told that the biographical information on appointees was not held centrally in the form requested. My view of that is simply—if not, why not? If something is published purporting to give public information, it is surely not too much to expect these bodies, most of which have full-time staff, to provide a list of their members' names.

I may now fall out with some of my Welsh colleagues because, oddly enough, there is one notable exception, although it is far from sufficient. There is a list of appointments made to public bodies by the Secretary of State for Wales. It details all public bodies in Wales and lists their appointees by name, residence and occupation, when the appointment commenced, when it will expire and the appointees' remuneration and time commitment. It does not, of course, tell us the criteria according to which people were appointed. Nevertheless, some effort has been made to provide information. I have a simple question: if the Welsh Office can do it, why cannot all the others?

Since the beginning of the year I have tabled more than 700 parliamentary questions to try to find out who sits on every one of the quangos. As we know, the first difficulty is getting the questions in bulk through the Table Office. It has its job to do but, nevertheless, if one wants up-to-date information, one needs to get the questions through as quickly as possible. I pay tribute to the patience of the Clerks in the Table Office who assisted me in tabling up to 80 questions a day. Nevertheless, I tabled more than 700 questions to find out who was on the quangos. Some Departments had already published lists of their members but as these are not held centrally it was almost impossible to know whether that was the case. It was difficult enough for a Member of Parliament, with access to the parliamentary on-line information service in the House of Commons Library, to find that information. It would be virtually impossible for a member of the public to gain access to it.

It is not only confusing to the public or to mere Members of Parliament, but many civil servants have not got a clue what is going on either. After I tabled the questions on quangos to the Home Office, I received a telephone call from an official and I was asked what I meant by the advisory committee on service candidates. Being the honest Member of Parliament that I am, I said that, frankly, I did not know, that it was something listed in the review of public bodies and that his guess was as good as mine. I also told him that it was an advisory body that did not publish an annual report, that it consisted of a male chairman, one male deputy chairman and five male and five female members. Other than that, I was up a cul-de-sac, so I suggested that he rang the Home Office. I was told that I was speaking to someone from the Home Office and that he did not know of the body. At least, I gave him credit for trying to answer the questions.

In dealing with some Departments, I have not only gone into a cul-de-sac, but run into a brick wall. For example, the Lord Chancellor's Department answered all 27 questions by saying: The information requested is not readily available; I will reply as soon as possible. To my knowledge, in some cases, that information is not only readily available, but if one can search it out it can be found in the bowels of the Library. It certainly should be there.

To take one positive example, I shall cite the Law Commission, which, there is no doubt, is a quango. I was told that the information on that quango was not readily available, yet its chairman's annual salary is £90,148 a year—easily lost in the Department—and there are three male members and one female member who receive £64,307 each a year. I was told that the Lord Chancellor's Department did not have the names of those five people who are receiving substantial sums of money. First, the Department should have such names readily available and, secondly, that information is available if someone could be bothered to look for it. If the Department looked in "Public Bodies", it would see, as I could, that the Law Commission publishes an annual report, which is placed before the House of Commons, and on page 2 it names the law commissioners. According to that Department, that information is not readily available.

To give another example, I tabled questions to the Ministry of Defence on 21 January and, to date, I have had no answers whatever to 23 questions on quangos. I have a list of those questions. Over a month later, the Secretary of State for Defence has been unable to tell me who are the members currently appointed to the review board for Government contracts. I would have thought that that was a powerful body which dealt with all the contracts going through the Ministry of Defence.

I could not be told the identity of the members who are currently appointed to the nuclear weapons safety committee. I would have thought that that was a key job and that the names would be readily available to any Secretary of State.

On the subject of our economic situation, I asked the Secretary of State for Defence who are the members currently appointed to the oil and pipelines agency. He said that he would answer shortly that and every other question. Four weeks later, I am no closer to getting the right answer.

Mr. Barry Sheerman (Huddersfield)

I was tempted to reprimand my hon. Friend in my intervention for being naive, but I am sure that, knowing him, he would never be accused of that particular vice. Is not it the fact that none of us should be surprised about what he is saying because secrecy goes hand in hand with corruption? As soon as one starts making public appointments, which are made not on the basis of merit, but on whether that person is a member, a supporter or a financial donor to a political party, corruption and secrecy stalk the land.

Mr. Kilfoyle

It certainly gives rise to the suspicion that people have something to hide when the information is not readily available, it is not detailed and it is not accessible to the general public. For example, I was not suprised, on considering the overseas project board and the members of that quango, when I saw the interested parties in the Malaysian dam scheme and that that board had a part to play in advising the Government on that type of project. I am somewhat naive and I hope that my hon. Friends will forgive me. I did not stop to think that many of those board members would have provided huge amounts of money to the Conservative party.

Having said that, I commend the few Departments which are ready to provide the information. With difficulty, I have been able to amass a huge file, which contains a massive number of sheets of paper on which there are lists of names. Some of the Departments realise that if they are not careful and if they give too much information, one may be able to trace a little more about the membership of some of the quangos.

Mr. Jonathan Evans (Brecon and Radnor)

The hon. Gentleman praised the Welsh Office earlier for publishing the names of people on quangos in Wales. Does he concede that if there were a general publication policy, it would answer the point raised by the hon. Member for Huddersfield (Mr. Sheerman)? I note from the publication that the Welsh Office council has a person named Councillor Jane Davidson as a member, who is also recorded in the index of the House of Commons as research officer for the Labour Member for Cardiff, West (Mr. Morgan).

Mr. Kilfoyle

The hon. Gentleman put two questions. I shall answer the first one simply. Yes, I gave credit where it was due, although I included the caveat that it would be nice to know the basis on which members are appointed. I do not have any problem with open government or try to divest the secrecy which surrounds many of those bodies. We are at one on that. May I continue to give an example where obfuscation rather than illumination is the order of day in the quangos?

We came across a series of quango committees, some of which I have great difficulty in pronouncing. There are committees on toxicity, on mutagenicity, and on carcinogenicity. [HON. MEMBERS: "Hear Hear] They are important committees because they deal with additives, chemicals in foods, consumer products and the environment. The preamble to their report, which was not given to me, of course, listed the professors involved. I thought that they would be eminent people involved in those three quangos and that it was good to know that one was in safe hands. The preamble said: Committee members are appointed as independent scientific and medical experts on the basis of their special skills and knowledge. I felt more comforted by that, until I was most surprised to find that there were registered interests for each of the committee members. It was not something of which I was readily apprised. Quite by accident, I found the register which listed all those eminent professors and noted the kinds of consultancies which they held. Bear in mind that they are considering toxicity, mutagenicity and carcinogenicity, about chemicals in food, in consumer products and the environment.

Some of their members have no commercial interests whatever to declare. However, on the toxicity committee, nine of its members declared a consultancy interest in some 30 companies. Two of the members were shareholders, two were employees and one received an occasional fee from companies in which he or she had a commercial interest. On top of that, they honestly declared that they had all sorts of research contracts with the companies. If we consider them, it is a roll call of honour. It is all about conflict of interest, about having open government and about ensuring that the people who make the decisions are seen for what they are and for what their interests may or may not be. That not is to suggest any impropriety on their part, far be it from me to do that. However, I want to highlight where there is a potential conflict of interest with those companies.

The companies include the Wellcome Foundation, ML Laboratories, Ortho Ltd., Pfizer Ltd., SmithKline Beecham, Sterling Winthrop Ltd., Syntex Ltd., Wyeth Ltd., Zeneca, Roche Holdings, Ciba-Geigy, Nestle, Sandoz, Rhone-Poulenc Rorer, TAP Pharmaceuticals; and the list goes on. Every chemical and drug company in Europe and North America has an interest in those people in the form of a consultancy or in some other form. Those very people are advising on the kind of pollution over which those companies are often found wanting. I believe that that information should be readily available in the public domain.

Mr. Hanson

I am pleased to hear from my hon. Friend that there is a register of interests. The Secretary of State for Wales, whom he rightly praised for producing a report on the membership of quangos, has just refused, in answer to a parliamentary question from me, to establish registers of interests for all quangos in Wales. So we do not know the interests of the people on those bodies, and we still do not have the accountability that we should seek.

Mr. Kilfoyle

I am not surprised by anything that emerges in connection with quangos. Just now I heard some sedentary comments from Conservative Members to the effect that I am a stupid man. I am perfectly happy to accept that if they mean that I, like most of the public out there, was in blissful ignorance, because the information is not readily available or accessible. I cannot go to any central collation of that information and seen who is making the decisions and what those people's interests are. If that is stupidity, I, like the bulk of the population, must plead 110 per cent. guilty.

Something positive had to come out of the process, but not much. I examined the details about other quangos. Hon. Members should bear in mind that the information is not available on a database, so it is a manual exercise to go through the papers about the quangos and find out who belongs where. One of the professors—it may be unfair to name him, because he is one of many—is on the committee on pesticides, the committee on toxicity, the committee on carcinogenicity and the medicines commission. All those are fee-paying posts, from which he gets up to £160 per meeting. He also has his professorship, and his consultancies with ML Laboratories, Ortho Ltd., Pfizer Ltd., SmithKline Beecham, Sterling-Winthrop, Syntex and Wyeth, his research fellowship with another company, and a pension from yet another chemical company. I have to say that whoever pays the piper calls the tune when that man gives his professional opinion on such matters.

When we look further into the quangos we come across other names that are repeated time and time again. The dread Sir Donald Wilson, the chairman of the Mersey regional health authority, has already been mentioned. The one thing on which I can agree with the hon. Member for Macclesfield (Mr. Winterton) is probably our mutual loathing for the gentleman in question. [Interruption.] I should not like to be thought to mince my words in any shape or form.

The gentleman in question forced through the trusts in the Mersey region as a vanguard of the NHS reforms. He used no local people, and there was no sense of accountability. He imported people en masse from the Tory shires; they moved across and made the decisions. They stopped hon. Members from having access to any information about their decisions, or to most of the information about their accounts. We were misled and there were misrepresentations at every stage. Now we see that the reward for Sir Donald is another promotion.

I wonder whether Sir Donald's deputy, Professor Alasdair Breckenridge—I nearly made a Freudian slip and said Myra—will get a further promotion. He is a professor of clinical pharmacology at the university of Liverpool and the deputy chairman of the regional health authority. It seems to go with the job that he has to spend so much time on quangos all round the country. Between teaching clinical pharmacology and running the regional health authority with the redoubtable Sir Donald, Professor Breckenridge is on the advisory committee on NHS drugs, the committee on the safety of medicines, the joint committee on vaccination and immunisation, and the medical research council. I am not even halfway through the list yet.

There are ways in which the problems can be tackled, but they require a will on the part of the Government to do certain things. First, we should produce an annual report listing the members appointed to all public bodies and giving the following information. First, the name—that is self-evident—and the occupation is an important sign of what knowledge and expertise someone can bring to the post. Then we should know the date on which the person was appointed and the date on which the appointment expires, the remuneration, the time commitment, any political offices held, past or present, and, obviously, a declaration of commercial interests.

I realise that that may be somewhat difficult, but a party that has done the best job since Maundy Gregory in making sure that it gets its way in appointing people to offices and jobs galore all over the land should be able to find a way to make that information accessible to the general public, not merely to Members of Parliament.

I shall touch briefly on the trusts, because they give an insight into the mentality and hypocrisy of Conservative Members. It is no accident that former Conservative Members of Parliament are heavily involved in the NHS hospital trusts. The Tories Lord Heyhoe, Sir Timothy Raison, Sir Robert McCrindle and Tony Favell are all heavily involved on a paid basis, earning anything up to £19,285 per annum for running health trusts. If that is not looking after your own, I do not know what is.

Several hon. Members


Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. There are 45 minutes available before the wind-up and many hon. Members want to catch my eye. I hope that the hon. Members whom I call will bear that fact in mind.

8.45 pm
Mr. David Shaw (Dover)

The Opposition motion suggesting that quangos and the use of contractors will result in a loss in the quality of public services, by increased fraud and waste, and by falling standards in public life is patent nonsense. Those appalling words describe the situation in Labour-run councils far more accurately than they do quangos or contractors.

Labour-run councils such as Monklands, Lambeth and Tameside lead the field—but, sadly, they lead it in nepotism and corruption. Monklands is extremely significant for the debate, because that is the constituency of the man who wants to be the Prime Minister of this country—[HON. MEMBERS: "Where is he?"] I gave him an invitation at 3 o'clock this afternoon to come and listen to the debate.

Mr. George Howarth (Knowsley, North)

On a point of order, Mr. Deputy Speaker. May I draw your attention to the fact that the debate is about the unelected state? The hon. Member for Dover is referring to people who are part of the elected state.

Mr. Deputy Speaker

That is not a point of order for me.

Mr. Shaw

Thank you very much, Mr. Deputy Speaker. I am ready for many points of order, because Labour Members are so sensitive about what I say about Monklands that they are always trying to interrupt my speeches.

Monklands is the constituency of John Smith, the man who wants to be Prime Minister of the nation. John Smith—[HON. MEMBERS: "Order."] John Smith closely supports—

Mr. Deputy Speaker

Order. Surely the hon. Gentleman and his hon. Friends do not think that Monklands council is a quango. We are discussing quangos and unelected bodies. I hope that the hon. Gentleman will stick to talking about unelected bodies.

Mr. Shaw

I made it clear in my opening remarks that I was talking about the allegations of falling standards in public life. In my view, that allegation applies, as I hope to demonstrate, far more to Labour councils such as Monklands than it does to quangos.

Mr. Deputy Speaker

Order. The debate is about unelected state bodies, not elected bodies. The hon. Gentleman must stick to the subject, or I shall rule him out of order.

Mr. Shaw

If I may say so, Mr. Deputy Speaker, I have read from the motion and I shall explain how there is an unelected state in Monklands. If you listen, you will find out that what I am saying fits in accurately with the motion. The motion mentions increased fraud—

Mr. Sheerman

On a point of order, Mr. Deputy Speaker. If the hon. Member for Dover continues to make allegations of corruption involving Members of the House, he should be called to order, or we shall call his speech to order.

Mr. Deputy Speaker

Order. The Chair will decide that.

Mr. Shaw

Thank you, Mr. Deputy Speaker. When the Opposition allow me to continue I shall explain how contractors, often connected with the leader of Monklands council, are taking money out of the council and the public sector, and how the leader of the council, a friend and close associate of the Leader of the Opposition, is involved in actions that fit the terms of the motion to a tee.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker. If the hon. Gentleman continues to make allegations about people who are unable to defend themselves in the House, is he prepared to repeat them outside the House to give ordinary citizens the right—

Mr. Deputy Speaker

Order. The hon. Gentleman can be assured that the Chair will decide whether the hon. Member for Dover (Mr. Shaw) is out of order.

Mr. Shaw

Among the people in Monklands who are known as the controlling Mafia, who were not elected for many of the actions that they carry out, is John Smith's election agent, a personal friend—

Mr. Deputy Speaker

Order. I have already drawn the hon. Gentleman's attention to this. I must tell him that he is going outside my interpretation—it is the Chair who decides. If he sticks to the motion, he will be all right. If he does not, I shall have to rule him out of order.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I hope that it is not the same point of order.

Mr. Sheerman

It is not the same point of order. The hon. Member for Dover has constantly referred to a Member of the House by name. He has been in the House long enough to know the convention. If he does not, he should go outside the Chamber and learn it. [Interruption.]

Mr. Deputy Speaker

Order. It is the same point of order that I have dealt with already, and I shall continue to deal with it in the same way.

Mr. Richards

Further to that point of order, Mr. Deputy Speaker. I seek your guidance because I understand that what my hon. Friend is saying relates to the motion. The motion says that Labour are concerned that the proliferation of quangos has been accompanied by a loss in the quality of public services, by increased fraud and waste". I believe that my hon. Friend is talking about fraud and waste in public services.

Mr. Deputy Speaker

The Chair will decide—I am sure that the hon. Gentleman is not challenging the Chair. I have already made my ruling. I ask the hon. Member for Dover to stick to the motion before the House. If he does not, he will have to resume his seat.

Mr. Shaw

I assure you, Mr. Deputy Speaker, that I have listened to almost all the speeches of Labour Members. The hon. Member for Oldham, West (Mr. Meacher) went extremely wide in his opening remarks and referred to fraud and corruption. I only hope that you will allow me to answer some of his points about fraud and corruption and his allegations.

Mr. Deputy Speaker

I will allow the hon. Gentleman to continue his speech if it is based on the motion before the House. This is the last time that I shall make that point.

Mr. Shaw

I give way to my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter).

Mr. Streeter

Does my hon. Friend agree that the whole argument of Labour Members is that locally elected councils are better at delivering services than quangos and that local authorities with elected members crack down on fraud and waste? If he does not agree, could he give some examples of local authorities which, although they have elected members, still have fraud and waste rampant in their organisations?

Mr. Deputy Speaker

Order. I must tell the hon. Member for Dover not to go down that road. I draw his attention to the motion before the House, which refers to quangos in the first line and which says in the second line: these organisations are not publicly accountable". The hon. Gentleman must base his speech on that.

Mr. Shaw

I have not yet started my speech—I am still making my opening remarks. I hope that you will bear with me, Mr. Deputy Speaker, as I develop my opening remarks to cover the unelected situation that exists and many of the points for which no one was elected in Monklands. The fact is—[Interruption.] May I continue and quote from Labour party members in the Monklands area about the unelected state in Monklands?

Mr. Richards

Does my hon. Friend agree with the motion, which says that there have been falling standards in public life because of quangos, as opposed to the continuation with elected bodies such as Monklands district council?

Mr. Shaw

I note my hon. Friend's point about falling standards in public life. I cannot accept that quangos are causing falling standards in public life. The whole argument that I am trying to put forward is that even Labour party members in Monklands believe that quangos would be better than the state of affairs that they have in the district council in Monklands.

In 1992, Catherine Miller, who is the secretary of the Holehills and Raywards branch of the Labour party in Monklands, East, said: This branch unreservedly condemns the nature of Cllr. Brooke's highly personalised and"—

Mr. Deputy Speaker

Order. That is it—I will not tell the hon. Gentleman again. As I interpret the motion in front of me, he is out of order. He must come back to order. If he does not, he must take his seat.

Mr. Shaw

It is getting very difficult for me to continue. I would not want to delay the House if—

Mr. Deputy Speaker

Order. The hon. Gentleman is making it very difficult for the Chair as well.

Mr. Shaw

I ask you to accept, Mr. Deputy Speaker, that I am speaking on the Labour motion, which has the words "loss in the quality of public services", "increased fraud and waste" and "falling standards in public life". I am addressing the words "falling standards in public life", "increased fraud and waste", and "loss in the quallity of public services.." All those things exist in Monklands. I believe that Monklands would be better run by a quango and that is the argument that I am trying to put forward. I hope that it will be accepted that Monklands would be better run by a quango than by the corrupt council that exists.

Catherine Miller, the secretary of the Holehills and Raywards branch of the Labour party, is complaining. The Plains and Caldercruix branch of John Smith's Labour party issued a statement in 1992 which said: Such entrenchment of power in so few hands is bad for local democracy … present dictatorial set-up of council committees and sub-committees is in such a bad state that they call upon the National Executive to fully investigate". In Monklands, they require a democratization process … so the council fully represents the entire electorate." In other words, the council is not representing the entire—

Mr. Deputy Speaker

Order. My patience is now exhausted. The hon. Gentleman must take his seat.

8.52 pm
Mr. Terry Davis (Birmingham, Hodge Hill)

It is my usual practice to respond specifically to the contribution of the previous speaker. However, for reasons which I am sure the House will understand, I shall not refer to the speech of the hon. Member for Dover (Mr. Shaw). Instead, I shall refer to the speech of the Chancellor of the Duchy of Lancaster.

The Chancellor of the Duchy of Lancaster was right on one point—there have always been quangos and non-departmental public bodies. However, he missed the whole point of Labour's motion. First, he failed to understand the issue of appointments to quangos and non-departmental public bodies. Of course, I accept that there has always been a tendency for different Governments to appoint people of their own political persuasion to all sorts of bodies. The issue today is that the Government have lost all sense of balance. Almost all of their appointments are of their political supporters; they do not appoint members of any other party or, indeed, people with no political affiliation if they can avoid it.

Mr. Jonathan Evans

The hon. Gentleman was not here a few minutes ago when I pointed out that a member of the Welsh Arts Council is the research officer of the hon. Member for Cardiff, West (Mr. Morgan).

Mr. Davis

I was present in the Chamber and I heard the hon. Gentleman's point, which I shall deal with in a moment. He should contain himself. Tonight, we are witnessing some rather intemperate behaviour from Tory Members. We would all get on better if we debated the motion instead of trying to score points. I shall deal with the petty hon. Gentleman as soon as possible.

As I said, the Government, whenever possible, appoint their political supporters, and they avoid appointing people who are not their political supporters. That charge has been made by many Opposition Members today—not just the Labour party. There is common ground among the Opposition parties that that is what happens. I think that most objective people would agree.

That does not mean that the Government never appoint members of other political parties. I was careful with my choice of words, because there may well be a researcher to one of my hon. Friends who has been appointed to a body in Wales. Frankly, the Government must be running out of Conservatives in Wales to appoint to public bodies, so I would not be surprised if they had to appoint the occasional socialist. They even do that in places such as the west midlands—as I will describe later, because I intend to make a balanced speech.

The charge is that, whenever possible, the Government avoid appointing to a public body anyone who is not a supporter. We saw that in the speech of the Chancellor of the Duchy of Lancaster. The right hon. Gentleman said that what was wrong in the past was that Labour Governments had appointed some trade unionists to public bodies. He did not just say that—of course, it is true—but added that they were Labour cronies. That is the way the Government think.

It is also true, of course, that Labour Governments appointed business men to non-departmental bodies, because previous Labour Governments attempted to achieve some sense of balance.

Several hon. Members


Mr. Davis

If Government Members will sit down and let me proceed with my speech, I will tell them that that was also true of previous Conservative Governments. The charge is that this Government have politicised all appointments. In the past, both Labour and Conservative Governments would make sure that there was some representation from other parties on non-departmental public bodies.

Mr. Richards

Is the hon. Gentleman aware that my right hon. Friend the Member for Wirral, West (Mr. Hunt), when he was Secretary of State for Wales, invited the Labour party to submit to him a list of people it considered suitable for quangos? Is the hon. Gentleman further aware that the Labour party has not submitted a single name to the Welsh Office?

Mr. Davis

I am sure that many bodies within the Labour movement have submitted lists of potential appointees. It is accepted by all dispassionate observers that there are very few people appointed by the Government—I do not say that there are no people—who are not members or supporters of their party. That is my point.

Other Governments, both Labour and Conservative, tried to achieve some balance. Of course they tended to appoint their supporters, but they made sure that some people were appointed from other parties.

The Government also seem obsessed with the idea that the only people who should be appointed to non-departmental public bodies and quangos are business men. I find that strange. It is clear that some business men should be appointed, but to suggest that only business men should be appointed neglects the obvious fact that this country is in an economic mess, and to appoint to run the NHS the people who have produced that mess seems wilful in the extreme.

The second point which the Chancellor failed to address was the balance between elected and non-elected bodies. He avoided that matter completely. He said rightly that the number of non-departmental public bodies had been reduced. My hon. Friend the Member for Oldham, West (Mr. Meacher) fairly and rightly pointed out that that ignored the fact that most of the bodies which were abolished were advisory bodies.

The bodies which have increased in number, and above all whose powers have been increased, are executive bodies, and the balance has been tipped in favour of appointed, rather than elected, bodies. There has been an increase in the number of executive bodies and in the power of those executive bodies.

The Chancellor said that more money had been given to the Housing Corporation to deal with social housing, and that is right. However, that has been at the expense of money which has been allocated—not given—to local authorities to provide social housing. My hon. Friends and I have made that point consistently throughout the debate.

The switch of power from elected to unelected bodies is true not only in the case of local authorities. The Government have also divested themselves of responsibility and passed it to unelected bodies. There are not only the famous and long-standing quangos, but the new-fangled agencies which have been set up precisely for that purpose.

My hon.Friends—most notably, my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman)—have said that Ministers will not answer questions, and will not deal with inquiries from hon. Members from any party. That is a way of shirking, avoiding and evading responsibility. Ministers pass it to agencies, such as the Benefits Agency, but they do not have the same responsibility to this House.

The Chancellor was right on one detailed point: we did not have elected health authorities before. Some of us would like to see that. We believe that we should democratise the NHS. However, the right hon. Gentleman is right to say that that was not the case under the previous Labour Government. It is true that the present Government have perpetuated it, but they have done more.

There has been not only an increase in the power of the non-elected bodies within the NHS, but a reduction in accountability. Hon. Members all know examples in which they have not been able to get answers. The Chancellor was quite wrong: it is impossible to get the accounts of trust hospitals, and we are refused access to the business plans of trust applications. That information is not made available, and financial information is the most important part of accountability.

The hon. Member for Spelthorne (Mr. Wilshire) gave a long discourse about the meaning of accountability and democracy. He was right to a small degree, because there is a difference between democracy and accountability. On the other hand, democracy involves accountability, and one also can have accountability in other ways. Appointees can be accountable to the body which appointed them.

The hon. Gentleman talked about head teachers, but did not mention the body to which they are responsible. He said that they are accountable to teachers, parents and students, but they are not. Head teachers have duties to those people, but they are not accountable to their colleagues, to parents and to students.

They are accountable to the one body which the hon. Gentleman did not mention—the governors. They are accountable to the governors because it was the governors who appointed them. It is the governors who have the power to hire and fire. That is what accountability means in the last resort. That is where head teachers are accountable.

We have seen from the report published by the Public Accounts Committee about the proper conduct of public business that those public bodies are less and less accountable. The report listed a number of examples, and referred specifically to the health service. The situation has become worse, and the Committee unanimously agreed on that. There was no difference of opinion between the Labour and Conservative Committee Members.

We agreed unanimously that there had been inadequate oversight by those in authority". The Committee specifically defined that as a failure to obtain information, infrequent meetings, decisions not properly reached and recorded. The Committee also found that there had been a failure to ensure that delegation of responsibility accompanied by clear lines of control and accountability, leading to the waste of large sums of public money. Finally, the Committee found that there was a failure to hold individuals personally accountable for their actions. I repeat that those were the unanimous conclusions of the members of the Public Accounts Committee.

I shall give examples, of which some have already been mentioned by my hon. Friends. Two examples are drawn from the health service. We found that in Wessex regional health authority there had been a serious failure on the part of the Regional Health Authorities to secure accountability from the then Regional General Manager". The manager was able to run riot through the health service in the Wessex region without being held accountable by the people appointed by the Secretary of State to make him accountable.

The same thing happened in the West Midlands regional health authority, my own region. We found: there was a serious failure by Members of the Regional Health Authority … in their duty to secure the accountability of regional management. The position has got worse. Whatever my disagreements might be about the reorganisation of the health service, I believe that, 10, 15 or 20 years ago, the management of the health service was more accountable to the people appointed to the regional health authorities than it is today.

The Chancellor of the Duchy of Lancaster said that he could not do anything about Sir Robin Buchanan, the former chairman of Wessex regional health authority, who was found to be personally responsible for the failures there, because he was waiting for the investigation by the Public Accounts Committee. There are two answers to that. First, I seriously believe that the Chancellor was misinformed. My understanding is that he received reports long before the Comptroller and Auditor General reported to the Public Accounts Committee.

Even if we put that on one side, the Chancellor has had the report from the Public Accounts Committee for a long time now. What has he done? Sir Robin Buchanan is still there. He has been promoted to a higher-paid job, to which he was appointed by the Secretary of State. What has been done to make him accountable and responsible for failures that occurred in Wessex regional health authority?

Mr. Kilfoyle

Will my hon. Friend give way?

Mr. Davis

I must press on.

The same thing has happened in the west midlands, where we found that members had failed to discharge their responsibility. What has happened? The very people who failed to control the management in the west midlands have been appointed to other jobs elsewhere in the health service.

That report was about the regionally managed services organisation in the west midlands. A year later almost to the day, we took evidence on another scandal in the west midlands—the problem of South Birmingham health authority. Once again, assurances had been made 18 months before, and nothing had happened.

The health authority was supposed to implement an action plan to restore the financial position of that health authority and had failed to do so. We were told that the action plan would not cause any damage to the service to the local community. We found that nothing had been done. What is worse, nothing had happened to the people who failed.

The question needs to be asked: to whom are members of the regional health authorities accountable? They are certainly not accountable to the Management Executive or to its so-called chief executive, Sir Duncan Nichol. My right hon. Friend the Member for Swansea, West (Mr. Williams) referred to the politicisation of civil servants. I find Sir Duncan Nichol the most political of civil servants, but even I have some sympathy with him when he is faced with health service managers who do not do what they are supposed to do.

Sir Duncan Nichol has appeared before the Public Accounts Committee several times and said, "I have no power. I cannot do anything about it. They ignore my letters. Sometimes they do not even reply." He cannot give instructions to managers. The chief executive cannot execute. He cannot do anything.

There is an old saying with which all hon. Members will be familiar, that newspaper proprietors are harlots because they have power without responsibility. Sir Duncan Nichol, the chief executive of the National Health Service Management Executive, is the opposite. He has responsibility without power. He is powerless. He is impotent. Managerially speaking, he is a eunuch. He cannot do anything about the problems. He is called chief executive, but he has no power.

However, there is one way to deal with the problem. The hon. Member for Clwyd, North-West (Mr. Richards) said that some socialists had been appointed to bodies even by this Government. In extremis, the Government have had to turn to the Labour party to find a new chairman of the South Birmingham health authority. They have appointed a well-known member of the Labour party to sort out the mess in South Birmingham.

That is the way in which we will sort out the mess at national level. The electorate will turn to the Labour party to do it.

9.2 pm

Mr. Graham Riddick (Colne Valley)

The debate today provides an opportunity for the House to debate the fundamentally different approach taken by the Conservative party compared with that of the socialists on the Opposition Benches. Conservatives believe in providing opportunities wherever possible for individuals to make their own decisions on a regular basis, using the market mechanism. The Labour party believes in allowing people to have a democratic choice once every four years or so.

Socialist Governments of old claimed that the British people owned the industries that they had nationalised. In reality, people had no control or influence whatever over those industries. The politicians and civil servants were in charge. The privatisation of those state-owned companies has led not only to massive improvements in efficiency but to greater responsiveness to individual consumers. That has been achieved by the introduction of competition wherever possible, the creation of powerful regulators where competition was not immediately possible, and the commercial reality that such companies can no longer rely on the state to prop them up.

I well remember some 16 years or so ago, when I used to drive many thousands of miles a year, that it was impossible to find a telephone kiosk that worked. It took six months to have a telephone installed in one's home. Now, because British Telecom knows that the only way to operate profitably is to provide customers with what they want, we have many more public telephone kiosks, and they work. One has only to ring British Telecom to have a telephone installed in a matter of days. So everybody wins. The consumer receives a decent service, shareholders see the value of their company increase and the Government receive enormous sums in corporation tax.

No elected politician has brought this situation about, except that a Conservative Secretary of State took the decision to privatise the company in the first place.

In British Gas, for example, domestic and industrial prices have fallen by 21 per cent. and 25 per cent. respectively in real terms since privatisation. Disconnections are at their lowest level ever. The same can be said of all the companies that we have privatised: the customers have benefited, be they of British Airways, Yorkshire Electricity or Cable and Wireless. The forces of competition and of the market can be used to improve many of our public services, but it means that there is less of a role for elected politicians.

Let us take education as an example. The Government have given more power to parents to decide which school to send their children to and, at the same time, through local management of schools we have given schools more autonomy and greater independence. So the more pupils those schools attract, the more money they receive. How does one attract pupils? By improving the quality of education offered to them, by tightening discipline and dress, and by offering a well-balanced curriculum—in short, by offering to parents what they as parents want rather than what the politicians on the local education authority think they want and should have.

Grant-maintained schools take this to its ultimate conclusion because they are like independent schools within the state sector: they flourish or die depending on whether they can attract enough pupils. The result is that such schools have improved their standards significantly. Surveys of grant-maintained schools have revealed more teachers being taken on, more staff being trained, more subjects being taught, more books and equipment being bought, smaller classes and better school food. Yet, ludicrously, one or two Opposition Members have labelled grant-maintained schools quangos.

One of the great advantages of some of the changes that I have mentioned, not just in schools but also in health authorities, in further education colleges and in universities, is that the process is leading to less politicisation of the services. In the old days councillors served on health authorities. They were not elected to the health authorities, although Opposition Members suggested that they were. Frequently they failed to turn up. When they did, they were often more interested in scoring party political points than in doing what was right for patients.

There has been a complete change. I know from my experience in Huddersfield that the West Yorkshire health authority, along with the Royal Huddersfield Infirmary trust, is single-minded in trying to improve patient care. They know what they must achieve and are doing their best to achieve it. When it comes to political appointments, I know one individual, out of all those who serve on the boards of the two authorities that I have mentioned, along with the local family health services authority, who is a card-carrying Conservative; I have no idea whatever of the politics of any of the others.

What a contrast that is to what used to happen when the Labour Government were last in power. I have done a little research over the past couple of days, and it is interesting to look at the composition of the Equal Opportunties Commission. The Labour Government used to put a token Tory on such bodies and, in the case of the Equal Opportunities Commission, the token Tory was Lady Howe. There are some who may claim that she was not altogether an archetypal Tory, but I am sure that she is, or at least was, a Tory.

The chairman of the Equal Opportunities Commission was Miss Bettly Lockwood, chief woman officer and assistant national agent of the Labour party. Other members of the commission included Lord Allen of Fallowfield, CBE, no less, general secretary of the Union of Shop, Distributive and Allied Workers; and Professor Gordon Barrie, a twice failed Labour parliamentary candidate. He later became Director of Fair Trading, and it is worth pointing out that the Conservative Government reappointed him on two, if not three, occasions. I was not altogether happy at his last appointment, but that is another matter.

Other members of the commission were Miss Ethel Chipchase, MBE, no less, secretary of the TUC's Women's Advisory Committee; Marie Patterson, vice-chairman of the TUC; and Mr. Eric Robinson, vice-president of the Socialist Education Association. That shows how the Labour Government put their own party people and trade union friends into the Equal Opportunities Commission.

The same applies to the Commission for Racial Equality. Interestingly, the CRE took over from the Race Relations Board which, before its abolition in 1977, contained two Conservatives: Mrs. Christie and Miss Roberts. It also contained a trade unionist in the shape of Mr. Cyril Plant. The token Tory on the Commission for Racial Equality was Mr. David Lane, a former Tory MP. But other members included councillor Bashir Maan, a Labour councillor; Mr. Tom Jackson, general secretary of the Union of Post Office Workers; Mr. Courtney A. Laws, former TGWU shop steward; and Mr. William Morris, who, as we all know, is now general secretary of the TGWU.

What is interesting about those appointments is that, in December 1977, the CRE also contained two Liberals, I now know what the Liberals achieved from the Lib-Lab pact—they got two of their people on to the CRE.

It is a little unwise of the Labour party to throw stones, because the information that I have just provided proves that the last Labour Government were in the business of packing those bodies and quangos with their own people.

Mr. Streeter

Is my hon. Friend aware that, just after Christmas, a member of my Conservative association in Plymouth buttonholed me at a reception, complaining bitterly that we were not appointing enough Conservatives to the local trusts and quangos. We were appointing people on merit rather than for their party political affiliation and they wanted to know what I was going to do about it. Is not that an accurate picture of what is going on?

Mr. Riddick

Yes, I have heard such complaints. Sometimes they are true. I make no complaint about that because a variety of individuals should serve on those public bodies. Contrary to what Opposition Members say, we are not packing those bodies with Conservatives. We are, however, putting a significant number of business men on them, but that is because we want them to be run in a businesslike way. The last Labour Government put trade unionists on their public bodies because they wanted them to be run in a trade unionist-like way.

Let us look at what else the last Labour Government got up to. At one stage, Jack Jones, the then general secretary of the TGWU, held 13 public appointments. His deputy general secretary, Harry Urwin, had nine such appointments. In May 1978, past and present officials of the TGWU were estimated to hold at least 27 paid or unpaid appointments.

Len Edmundson and Hugh Scanlon of the engineers' union held 11 between them; Reg Bottini—a name from the past—the retired leader of the agricultural workers, had nine appointments; and Sir George Smith, the general secretary of the Union of Construction Allied Trades and Technicians, had eight.

George Woodcock, who, it will be remembered, was general secretary of the Trades Union Congress, gave the game away when he made quite clear what qualifications were appropriate to securing appointment to public bodies. He said: Seniority, the muscle power of your union and competence—these are what you need to get a public job, and in that order of priority. At the same time, the then Secretary of State who was responsible for the social services—David Ennals—removed 32 of the 90 health authority chairmen and replaced them with Labour party hacks and supporters.

Mr. Fabricant

Does not my hon. Friend think it rather strange that, while we are seeking Labour party volunteers for trusts, that party seems unwilling to put people forward? We have heard about this situation in Wales. Is it not even more outrageous that the Labour party should complain that the people serving on trusts are mainly Conservatives?

Mr. Riddick

I am grateful to my hon. Friend, who has made his very important point in his own way.

It is clear that, if there is no other way in which some public services and functions can be made accountable to individuals and communities, accountability must come through the democratic process. But no one should imagine that elected politicians are paragons of virtue. Indeed, the behaviour of many Labour local authorities has brought local government into disrepute.

I am sorry that my hon. Friend the Member for Dover (Mr. Shaw) was not able to tell us about the Monklands council. Of course I respect your ruling, Mr. Deputy Speaker, but I look forward to the day when my hon. Friend will be able to tell the House exactly what the Monklands council has been getting up to. We know that it has operated a system whereby a relative of a councillor who wants a job—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. I hope that the hon. Gentleman is not trying to test my patience.

Mr. Riddick

I am not trying to test your patience, Mr. Deputy Speaker; I am drawing attention to the role played by quangos. These bodies, which comprise unelected people, sometimes act in a more appropriate way than do elected politicians. That is the important point. The fact that, in the case of the Monklands council, green forms were given to job applicants related to councillors while pink forms were given to people who were unemployed is worth getting on the record.

Mr. Deputy Speaker

Order. I hesitate to interrupt the hon. Gentleman again, but I hope that he will not force me into taking action that I have taken previously. have already ruled on this matter, as he knows. He must stick to the motion.

Mr. Riddick

I should like to refer now to the Labour authority in my area, which has set up a non-elected quango—a joint venture with a private company, Henry Boot. This undertaking is taking work away from private developers. The problem is that there is a conflict of interests. The council is operating both as planning authority and as developer. That should not be encouraged in any shape or form.

Mr. Fabricant

Does my hon. Friend agree that it is outrageous of the Labour party to oppose quangos when its manifesto contains a huge list of quangos that it would like to introduce? Is he aware that it mentions a Scottish parliament, a Welsh assembly, English regional government, a Greater London authority and a regional development agency? It talks about 460 local authorities in England, but it wants local consumer councils, local quality commissions and local centres for innovation. The list is endless. Does my hon. Friend agree that that is the ultimate in hypocrisy?

Mr. Riddick

When I talked about allowing other hon. Members to make short speeches, I was thinking of Opposition Members. My hon. Friend has just made his speech and I congratulate him on it. It was extremely good and concise.

The debate has again shown the Labour party's belief in the primacy of the politician over the individual. [HON. MEMBERS: "It does not believe that."] I believe that it does. Conservative Members believe in the primacy of individuals as users of services, be they gas, electricity, telecommunications, education or health care. We have had a whiff of hypocrisy from the Labour party today. It packed quangos with trade unionists and Labour hacks when it was in power and Labour councils have undermined its claim to be the party of integrity, let alone its claim to be a party of government. I shall, therefore, be delighted to support the Government in the Lobby.

Mr. Dafydd Wigley (Caernarfon)

On a point of order, Mr. Deputy Speaker. Is it not possible to ensure that hon. Members from all parties who have attended this debate have an opportunity to speak? Quangos are the most important issue on the political agenda in Wales. The people of Wales will find it incredible if the hon. Member for Delyn (Mr. Hanson), who has published a standard work on the issue, and other Welsh Members do not have the opportunity to speak on the subject in the only Parliament that we have. They will also find incredible the sort of abuse that we have heard in the Chamber tonight.

Mr. Deputy Speaker

The occupant of the Chair has no control over the length of speeches. I appealed earlier for shorter speeches so that I could call more hon. Members, but unfortunately my request fell on deaf ears.

Mr. Fabricant

On a point of order, Mr. Deputy Speaker. As a new and inexperienced hon. Member, I ask whether it is normal and courteous for hon. Members who want to make speeches to be present throughout the debate? Is it not the case that the hon. Member for Caernarfon (Mr. Wigley) has not been here most of the time?

Mr. Wigley


Mr. Deputy Speaker

Order. There are common courtesies in the House, which I have noticed many hon. Members have not respected recently. The hon. Member for Caernarfon (Mr. Wigley) has been in the Chamber all the time that I have been in the Chair.

9.22 pm
Mr. John Garrett (Norwich, South)

This has been an excellent debate. It has reached into the heart of some important constitutional issues. Not long ago, during a sitting of the Sub-Committee of the Treasury and Civil Service Select Committee, Sir Robin Butler was asked whether the Government, which consisted of 30 main Departments, was being transformed into a civil service that consisted of 30 ministerial head offices, about 150 executive agencies and units, hundreds of quangos—such as training enterprise councils, trusts and corporate organizations—and thousands of contractors, all of whom were trying to make a profit. Sir Robin said, honestly: yes, I do not think that is an inaccurate description". That admission of the dismemberment of Government has a number of important implications for the ability of a Government to manage and control the activities of the constellation of providers and far-reaching implications for public and parliamentary accountability. That argument was advanced in a thoughtful speech by the hon. Member for Wantage (Mr. Jackson).

The dismemberment of Government considerably affects parliamentary control. For example, how will a Select Committee that is set up to examine the policy, spending and administration of a Department cope with having to scrutinise the policy and legislative activities of a Department's headquarters, a dozen agencies, scores of quangos and hundreds of contracts covering work for which a Minister is nominally responsible?

The first question concerns whether the Government are willing to contemplate the additional resources that would be required by Select Committees to carry out their work in the new political environment. Ministers have been captivated by the idea of entrepreneurial government. They are entranced by peformance pay, agency formation, privatisation, quangos and contracting out without ever thinking through the total effect. The effect we are particularly concerned with tonight is the loss of public accountability arising from the transfer of public services to bodies headed by unelected Government appointees and contractors. There is no doubt that that represents a severe loss of democratic control which diminishes our system of governance.

The unelected state is characterised by powerful, big-spending quangos and a policy of handing out Government services to private contractors—a dangerous development. Most quangos used to be advisory bodies. Today's new quangos are executive bodies. The Government of 1979 declared war on the first kind. The Government are bestowing more and more power on the new quangos to spend public money. It has been calculated that, by 1996, more than 7,700 public bodies controlled wholly or partly by Government appointees will be responsible for spending £54 billion of taxpayers' money. Today, more than £24 billion in spending has passed from local authorities alone to unelected quangos. An appointed elite has acquired huge responsibilities for local government services and some 40,000 quango appointments are now made by Ministers.

Thanks to a number of parliamentary questions put by my hon. Friends, which were referred to earlier in the debate, we have discovered that Wales is now the land of the rising quango. Thanks to the National Audit Office, we know what a number of them have been up to. The hon. Member for Truro (Mr. Taylor) underestimated the rule of those baronies in Wales. A study by the university of Wales shows that £2.1 billion of Welsh Office spending, or 34 per cent. of the total, was dispensed by quangos employing 60,000 people. The boards of those quangos were filled by 1,260 appointees, of whom 80 per cent. were male.

The Government will not wish me to remind them, as others have today, about the scandals of the Development Board for Rural Wales or the Welsh Development Agency. The Secretary of State for Wales has been reported as being "very upset" by those events and has demanded a "sharper focus" by the Welsh quangos. He might focus more sharply on the Tory placemen who occupy so many prominent places on those boards.

Mr. Jonathan Evans

Will the hon. Gentleman give way?

Mr. Garrett

No. I am in the mere foothills of my argument, so the hon. Gentleman must wait.

A frequent characteristic of quango chairmen is that they have run unsuccessful insurance or property companies or have been involved in Tory politics. In my own county of Norfolk, the chairman of the East Norfolk health commission—a new quango—will be none other than the hapless John Alston, a local Tory politician who last year managed to lose Tory control of Norfolk county council for the first time in 104 years.

Last week I went to a seminar by the Norfolk and Waverley training and enterprise council for "non-private sector stakeholders" in the TEC. They appear to be local government and voluntary organisations. The obvious question was, "Where is the stake?" I might have asked, "Where is the beef?" It soon became apparent that those public-sector bodies had no stake in the local TEC. The local TEC is unelected, unaccountable, undemocratic and packed with unknown business men. It has a poor training record and has been particularly criticised for its attitude towards trainees with special needs. Why? Because trainees with special needs are unremunerative.

How can the policies of a TEC be influenced? How can we remove the incompetent from the boards of TECs? They spend £1.8 billion a year. What logic governs the appointments and remuneration of chairmen of quangos when the chair of the Horserace Totalisator Board is paid £92,000 a year and chair of the Parole Board gets £45,000 a year?

Do job descriptions exist for all those posts? Will they be made public? Will the Government allow Select Committees to examine appointees to chairmanships? That issue is supported on both sides of the House. We have dealt fully today with the lack of accountability of quangos. The hon. Member for Wantage referred to the overload on Parliament. My right hon. Friend the Member for Swansea, West (Mr. Williams) made a powerful and expert speech. The hon. Member for Southend, East (Sir T. Taylor) struck a note. I am a European Unionist, but what he said is absolutely true. The democractic deficit in the insitutions of Europe at the moment means that unelected people make decisions that affect the lives of all our constituents. I must concede that. He is quite right. We must introduce new methods of democratic accountability in that system, too.

My hon. Friends the Members for Warrington, South (Mr. Hall), for Liverpool, Walton (Mr. Kilfoyle) and for Birmingham, Hodge Hill (Mr. Davis) spoke of the abuse of power, but, as I said at the outset, there are much more dangerous developments than quangos, for example, market testing or piecemeal contractorisation—a key characteristic of the unelected state. It has been copied here from practice over the past 12 years in the United States. Its bible is "Reinventing government—How the entrepreneurial spirit is transforming the public sector" by Osborne and Gaebler. I have heard it recommended by Ministers. It is a work so vacuous as to attract notice even among American management texts. Essentially, the message of its authors is that Government should steer and not row". That means that Government—local or central—should make policy, but, in general, contractors should deliver public services. That is what many Conservative Members think.

Ministers and, even more unfortunately, civil servants, are happy to admire the huge American market-testing effort, where contractors provide a high proportion of federal and state services. In the environmental protection agency in the United States, contractors not only virtually run the show, but also endorse and approve their own invoices. Conservative Members do not seem to be aware of the enormous backlash in America against contractors now that their nefarious practices are coming to light.

I recommend to the House—it can be obtained from the Library—the recent hearings on Government contract mismanagement conducted by an investigatory subcommittee of the congressional committee on energy and commerce. It tells us of the waste of billions of dollars of taxpayers' money. It tells of the outrageous billing and performance practices of contractors, including the huge corporate contractor who charged for boarding an executive's dog, the contractor who charged tens of millions of dollars for what American legislators called "outlandish entertainment" and the construction firms that hire equipment from their executive's spouses.

Of course, it will be argued that those practices could not happen here, which brings us to an important question that I hope the Minister will answer. Who will audit the charges and the performance of contractors who benefit from the market-testing procedures that are run by British Government? Will it be done by Departments, by private auditors or by the National Audit Office? The Comptroller and Auditor General recently told the PAC that the NAO would have no right of audit of contractors, which means that substantial spending programmes currently audited by an Officer of Parliament are put over to private contractors who are not auditable.

It sticks in my throat to read in the Government's amendment about the increased powers and independence given to the Comptroller and Auditor General". For 17 years, I campaigned for a more powerful state audit body. For 10 years, I was the only campaigner. I was joined later by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and one or two Conservatives. That development was resisted tooth and nail by the Government. We sponsors of the Bill that became the National Audit Act 1983 were called into No. 11 Downing street and told that the Queen would be annoyed. We were told by a noble Lord, who at the time was Leader of the House of Commons, that the Queen would be annoyed if greater control of the NAO were given to this Parliament. We were told that the public would be greatly offended if the 700 accountants employed by the NAO were made House of Commons staff.

What is more, we were eventually told by the Tory Chief Secretary to the Treasury—who is now a Commissioner in Brussels, and had fought us throughout the process—that in no circumstances would he allow the National Audit Office to be allowed, as a constitutional principle, to pursue state funds wherever they went. That is still the case. If the Chancellor of the Duchy is so keen on the state audit system, why does he not allow a change in the system so that the Comptroller and Auditor General can pursue state funds wherever they go?

It is not uncommon for contractors to discover and claim new charges after they have won a contract and cannot easily be dislodged. That is what is happening in this country right now. For example, the General Motors subsidiary EDS appears to have won the market test for providing information technology services for the Inland Revenue, without an in-house bid being allowed. EDS—which I believe was founded by Ross Perot—will take over some 2,000 Inland Revenue staff.

However, EDS has already said that it may want up to £50 million for redundancy payments to Inland Revenue workers who refuse alternative work, or refuse to relocate from Telford to the EDS office near London airport. Will the Minister tell us where the liability lies for those redundancy payments? Will any worker in the Inland Revenue—

Mr. Jacques Arnold

Will the hon. Gentleman give way?

Mr. Garrett

I am asking the Minister the questions.

Mr. Arnold

I am asking you a question.

Mr. Garrett

Does the hon. Gentleman mean that he is asking you a question, Mr. Deputy Speaker?

Will any worker in the Inland Revenue who refuses to relocate be deemed to have resigned and therefore not qualify for a redundancy payment on civil service terms? That is a plain question. When the contract is officially awarded, one monopoly public provider—an accountable civil service unit—will be replaced by a monopoly private provider, accountable to the board of General Motors. Once the contract is awarded, how can it be cancelled?

The Inland Revenue provided no costings of the present arrangements, so how do we know whether EDS is cheaper? Will the Minister place the costings in the Library, so that we can find out? We know what EDS bid and we would like to know whether this represents a saving. If any savings are achieved, they must be at the expense of the jobs, or the terms and conditions, of civil service staff. For example, civil service equal opportunities will not apply to EDS; it will be obliged to obey equal opportunities law, but not equal opportunities in the civil service.

EDS will control all computerised tax records for individuals and companies in the United Kingdom. What arrangements will be made to ensure that the confidentiality to which we have been accustomed will be maintained by the private contractor? The same question must be answered in regard to the proposed privatisation of the Insolvency Service of the Department of Trade and Industry, which has a great deal of sensitive information.

In general, market testing has not been a great triumph for the Government. In 18 months, tendering has been completed for £700 million worth of work—less than half the target amount. Savings of £100 million are claimed, compared with a target of £375 million; but the savings exclude the costs of abandoned market tests, which have already cost the Department of the Environment £500,000. They also exclude the huge costs of consultants—£37 million—in the setting up of market testing. They exclude efficiency losses from the transfer of work in the course of what amounts to a hostile takeover—which always leads to loss of efficiency. In all, the true savings are probably less than £40 million.

Even when an in-house bid wins a market test—44 per cent. of in-house bids have won—the market test must be repeated every three years. When people's jobs are up for auction every three years, what happens to long-term planning, staff development and morale, recruitment and commitment to public service?

Mr. Arnold

Will the hon. Gentleman give way?

Mr. Garrett

I am sorry, but I have no time. I must allow the Minister 20 minutes.

Mr. Arnold

On a point of order, Mr. Deputy Speaker. Is not it in order for the hon. Gentleman to reply to the debate and to my specific questions about Tameside council?

Mr. Deputy Speaker

The hon. Gentleman is responsible for his own speech.

Mr. Garrett

A report by Peat Marwick at the end of January—[Interruption.]

Mr. Derek Enright (Hemsworth)

The Government are frightened of it.

Mr. Garrett

I do not mind.

Mr. Andrew Mackinlay (Thurrock)

The Government are corrupt.

Mr. Nigel Spearing (Newham, South)

What about Castle Point?

Mr. Deputy Speaker

Order. The House must settle down.

Mr. Garrett

A report by Peat Marwick at the end of January—this is not the Labour party research department, this is Peat Marwick—said: The contracting-out of public services to private firms is likely to trigger an explosion in fraud and corruption. They should know. It continued: Backhanders and slush money will flood public agencies as firms try to cut themselves into lucrative government contracts. Government contracting out of services puts at risk a public service tradition that has stood the country in good stead for more than 100 years. That all adds up to falling standards in public life. We have a head of the home civil service who tells the Scott inquiry that Ministers are accountable but not responsible—a meaningless concept. When I observed recently to a permanent secretary that the Department of Social Security Benefits Agency did nothing to increase the take-up of benefits, which one would think that it would do if it was helping public service, and that some benefits had take-up of only 60 per cent., he said to me: Sixty per cent. is a good market share. I must admit that I have been quite friendly with every Minister for the Civil Service since they were invented as a result of the Fulton committee, which I served, in 1968—a long time ago, 26 years—but I have never come across a Minister such as the one that we have. We have a Chancellor of the Duchy who has been publicly humiliated by the Scott inquiry and will soon be left twisting in the breeze by the Prime Minister, and quite right too. We have a Government service, once the envy of the world, which is becoming riddled with jobbery and croneyism. Ministers should be ashamed.

I ask the House to vote for the motion before us.

9.41 pm
The Parliamentary Secretary, Office of Public Service and Science (Mr. David Davis)

I start, a minute or two late, by paying a tribute to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, for the work that he has done. Conservative Members at least take it seriously. We do not treat it simply as a party political bullet to fire across the House whenever it suits us.

I must first put right some of the revisionist history of the hon. Member for Norwich, South (Mr. Garrett), who has just spoken. He sought to rewrite history on the subject of the National Audit Office. I am perfectly willing to believe that he campaigned in the 1970s for many years against the Labour Government to get that instituted. There was indeed a PAC reprt calling for that.

I remind the hon. Gentleman, however, that in 1980 a Green Paper on that subject was issued by the Conservative Government. In 1981, a White Paper on that subject was issued by the Conservative Government. As the hon. Gentleman said, it went through. I think that Norman St. John-Stevas, that well-known Labour party member, carried it through, and an extremely well-drafted measure it was too when it was passed.

In addition, we also set up the Audit Commission, in the teeth of Labour opposition because it attacked their own little private ponds that they do not like to speak about. That is something else that the Labour party never did in office. The Labour party, while in Opposition, is good at speaking about freedom of information, for example, and doing nothing about it, all the time that it is in office, or about many other measures. It is very good at that type of thing.

We also introduced the public bodies document that has been referred to today, which, contrary to what the hon. Member for Oldham, West (Mr. Meacher) said, lists the appointments and what the appointees are paid. It is time that he started to read his brief more carefully.

More seriously, the hon. Member for Oldham, West talked about introducing quangos—as he called them—with more powers than ever before. He clearly has a short memory, or perhaps he was overloaded during his time as a Minister, but it was, of course, Labour that introduced the National Enterprise Board. What were the parliamentary limits on the National Enterprise Board? Its parliamentary limits were solely its borrowing limits. Unlike all our non-departmental public bodies—I use their proper name—which are open to the Public Accounts Committee and accountable to Parliament through ministerial responsibility, the NEB was not quite so open.

The NEB was established under the Industry Act 1975. The draft operating guidelines were published in March 1976 as the board began work but Parliament was given no opportunity to debate the draft. The first debate took place in January 1977. The NEB's books were not open to the Comptroller and Auditor General. Where was the audit in that? Only two three-hour periods of PAC examination were allowed into its financial activities in March 1977.

The hon. Gentleman also tried to say that market testing was a Tory plot to divert money to companies that fund Conservative central office; that was virtually what he said. That is odd because 60 per cent. of the market tests went to in-house teams. Perhaps the First Division Association is a Tory front organisation. I shall bandy the facts with the hon. Gentleman any time he likes. There was a proper bidding process.

Mr. Garrett

What about the cases where no in-house bid was allowed and where the contract went to a single contractor, such as the bid for the Inland Revenue information technology?

Mr. Davis

I recommend that the hon. Gentleman reads our White Paper which outlines the hierarchy that the contractors had to go through. There were £100 million worth of savings from that programme. The hon. Member for Oldham, West asserted that nine times that amount of money—£900 million—was spent on carrying out the consultation. I am sorry to say—

Mr. Meacher

The figure to which I was referring, and which appears in Hansard, was the total figure for all consultancy contracts. The figure was between £100 million and £900 million. While I am on my feet, I ask the hon. Gentleman to explain why, in the case of the Driver and Vehicle Licensing Agency, the Chancellor of the Duchy of Lancaster refused to accept the in-house bid even though it was £1 million cheaper than that of the private contractor?

Mr. Davis

The hon. Gentleman does not understand the difference between a benchmarking enterprise and an in-house bid. His colleague asked about redundancy costs. The £100 million was net of the attributable costs of the market testing exercise and the redundancy costs.

Mr. Garrett

How many redundancies will there be?

Mr. Davis

Redundancy costs, where they occur, will be in the charter White Paper, which will be published very soon. He can look forward to it. I am happy to give it a free advertisement.

The hon. Gentleman also asked about the audit of contractors. It just goes to show how little he understands what the process is about. What we are after with market testing is the best quality and the least cost. That is clear and transparent. One almost does not need an audit to better the quality and measure the cost.

The hon. Gentleman also mentioned EDS Scicon, which is being negotiated with the Inland Revenue, and asked why an in-house bid was not allowed. That is a fair and reasonable point, which deserves a fair answer. The reason is simple. One of the strategic considerations was allowing the best possible career opportunities for the people who work in that operation. The only way in which that would be allowed and achieved is if they go into the private sector—[Interruption.]—and give their business the chance to grow with the best possible technology, which is certainly not available in the in-house arrangements.

The Labour party is the low tax party. It throws away the idea of £100 million in the current year and another million—

Mr. Straw


Mr. Davis

I am short of time.

Mr. Straw

I am grateful to the hon. Gentleman. All of us are bemused by the tautologous phrase "strategic considerations". Is he claiming that the only way in which dedicated civil servants who had been working for the Inland Revenue for years and years could have improved their career prospects was by being compulsorily transferred into a private sector company, which was not competed against by the public sector?

Mr. Davis

I shall be quick to answer. In the information technology area, in which there is a great deal of external market to be won, there will be enormous gains for the staff.

I wish to try to respond to a few of the points which were raised in the debate. The right hon. Member for Swansea, West (Mr. Williams) corrected my right hon. Friend about the dismissal of Baroness Macleod. I shall briefly read a report from The Daily Telegraph of 27 June 1978. In talking of the National Gas Consumer's council under the past Labour Government, it said: The removal late last year of Lady Macleod, widow of the Conservative Minister Mr. Iain Macleod, as chairman of the council is only the most notable of Conservative casualties. She was replaced by Mrs. Naomi McIntosh, pro-Vice Chancellor of the Open University and a former Labour member of Haringey borough council. The change upset a Labour-Conservative balance at the top of the organisation established as deliberate policy when it was set up by the Conservatives in 1972. That makes that point clearly—[Interruption.]

Mr. Deputy Speaker

Order. The Opposition Front Bench Members were listened to in a reasonable way and it is only right and proper that they should listen to the Minister in a reasonable way.

Mr. Alan Williams

To remind the Minister of what I said earlier, far from arbitrarily dismissing Lady Macleod, in fact, she had a second term of office. I reappointed her when I was the Minister dealing with consumer affairs. She had two terms of office, one under the Conservative Administration and one under the Labour Administration. It was only after the second term that she was replaced.

Mr. Davis

I rest on the point that a balance established under a Conservative Government was destroyed by a Labour Government.

I also want to take serious issue with a number of Opposition Members who misquoted Baroness Denton. I shall quote what she has said because the misquotation has been used to imply some level of political selection which simply does not exist. Her letter said: Your article … quoted me out of context and gave a very misleading impression. It would be helpful if your report had explained that my lack of having 'knowingly appointed a Labour supporter' to a public appointment was due to the fact that my discussions with candidates concentrate on the needs of the post and what skills they can bring to it. I do not question them on their political persuasion. As a reaffirmation of that, many Opposition Members made the point that they have tabled many parliamentary questions on that subject. One answer to one of those questions was never mentioned—the answer to a question of what was known about the political affiliations of the people who are listed on the public appointments central unit. The answer was that the political affiliation was known of 13 per cent. of the members. The reason why such a small number of political affiliations were listed was that we do not ask. We do not know and we do not need to know.

Mr. George Howarth

Will the hon. Gentleman give way?

Mr. Davis

I am afraid not.

Many funny statistics have been cited today—some by the right hon. Member for Swansea, West—mostly by changing the basis of the numbers being used. I have heard next steps agencies being cited as quangos. Yet next steps agencies consist solely of civil servants and are responsible to Ministers. So they are not within the remit.

Even if all the public bodies listed were included, the assertion that there are more members of those than members of local elected bodies would still be untrue if we took out the tribunals and advisory bodies. More than half of the people concerned are on tribunals, which are apolitical and clearly directed towards the purpose of making judgments outside the political arena. It is clear that many hon. Members today got the argument wrong.

Mr. George Howarth

Will the Minister give way?

Mr. Davis

Not now; I have given up enough time.

My right hon. Friend the Chancellor of the Duchy of Lancaster gave the House a sobering reminder of Labour's appalling record on public appointments in the 1970s. He talked about the 39 members of the TUC council who held 180 appointments—not just a few, but 180. Twenty-seven appointments went to the Transport and General Workers Union alone; we heard the list of Jack Jones's 13 public appointments.

I would not object to that if those old union warhorses had been people of enormous merit, or political polymaths selected for their superb skills, but that was clearly not the case. We heared what George Woodcock said—that the criteria were seniority, the muscle power of your union and competence"— in that order or priority. Competence came third after seniority and union power. That tells us something about what the Labour party has asserted today

That was all too much even for one Labour Member of Parliament, who talked about the gravy train and said that the union boys seemed to run smoothly from job to job as if they were on a conveyor belt. [HON. MEMBERS: "Who?"] Gwilym Roberts.

When we say such things we are always told that that was all 15 years ago and it does not matter now. I wonder about that. We heard about David Ennals and all the things that he did, and that may have been 15 years ago, but let me remind the House of something rather more recent—the immortal and embarrassingly honest words of Mr. Tom Sawyer, the deputy general secretary of the National Union of Public Employees. In June 1992 he said: while we continue to fund the Party we'll have a say—it's crude as that … no say, no pay. From Woodcock to Sawyer the unions have been clear. They pay the bills; they want the jobs. If Labour got back into power we would see more of the same. More union placemen clogging up lists of public appointments. The unions sponsor every member of the shadow Cabinet and 165 Opposition Members, and they will continue to play a decisive role in the election of the Labour party's leader and deputy leader. The unelected state is sitting on the Opposition Benches—long may it remain unelected.

Labour not only gives jobs to union placemen; it has a sinister style and a set of tactics that it adopts whenever it gets a chance to run everything. The hon. Member for Oldham, West said that the Government had taken greater control of the state and were playing a bigger underhand role. But I shall read the House an extract from The Guardian: Mr. Eric Moonman, former Labour MP and chairman of the Islington health authority, north London, said yesterday that he was resigning from the Labour Party over a questionnaire from Mr. Meacher. Mr. Moonman said, 'I am being asked to spy on colleagues to find out their views and voting records. I cannot see the point of doing this, and I think the investigation would be prejudiced. Some of the people I would be asked to report on are not even members of any political party. Who sent the questionnaires? Who asked Mr. Moonman to spy on his colleagues? Who behaved in what was described in The Guardian as a Stalinist manner? It was none other than the Labour spokesman on public service and citizens rights.

Not content with infiltrating health authorities, Labour has intimidated national health service managers seeking to apply for trust status. Before the last election, the party even threatened to sack hospital managers who failed to toe the line if Labour won the election and refused to go on trusts, so all of their comments about not having a balance are nonsense.

Mr. Derek Foster (Bishop Auckland)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 263, Noes 308.

Division No. 146] [10 pm
Abbott, Ms Diane Dobson, Frank
Adams, Mrs Irene Donohoe, Brian H.
Ainger, Nick Dunnachie, Jimmy
Ainsworth, Robert (Cov'try NE) Dunwoody, Mrs Gwyneth
Allen, Graham Eagle, Ms Angela
Anderson, Donald (Swansea E) Eastham, Ken
Anderson, Ms Janet (Ros'dale) Enright, Derek
Armstrong, Hilary Etherington, Bill
Ashton, Joe Evans, John (St Helens N)
Austin-Walker, John Ewing, Mrs Margaret
Banks, Tony (Newham NW) Fatchett, Derek
Barnes, Harry Faulds, Andrew
Barron, Kevin Field, Frank (Birkenhead)
Battle, John Rsher, Mark
Bayley, Hugh Flynn, Paul
Beckett, Rt Hon Margaret Foster, Rt Hon Derek
Beith, Rt Hon A. J. Foster, Don (Bath)
Bell, Stuart Foulkes, George
Benn, Rt Hon Tony Fraser, John
Bennett, Andrew F. Fyfe, Maria
Benton, Joe Galloway, George
Bermingham, Gerald Gapes, Mike
Berry, Dr. Roger Garrett, John
Betts, Clive George, Bruce
Blair, Tony Gerrard, Neil
Boateng, Paul Gilbert, Rt Hon Dr John
Boyes, Roland Godman, Dr Norman A.
Bradley, Keith Godsiff, Roger
Bray, Dr Jeremy Golding, Mrs Llin
Brown, N. (N'c'tle upon Tyne E) Gordon, Mildred
Burden, Richard Graham, Thomas
Byers, Stephen Grant, Bernie (Tottenham)
Caborn, Richard Griffiths, Nigel (Edinburgh S)
Callaghan, Jim Griffiths, Win (Bridgend)
Campbell, Mrs Anne (C'bridge) Grocott, Bruce
Campbell, Menzies (Fife NE) Gunnell, John
Campbell, Ronnie (Blyth V) Hain, Peter
Campbell-Savours, D. N. Hall, Mike
Canavan, Dennis Hanson, David
Cann, Jamie Hardy, Peter
Cartile, Alexander (Montgomry) Harman, Ms Harriet
Chisholm, Malcolm Harvey, Nick
Clapham, Michael Hattersley, Rt Hon Roy
Clarke, Tom (Monklands W) Henderson, Doug
Clwyd, Mrs Ann Heppell, John
Coffey, Ann Hill, Keith (Streatham)
Cohen, Harry Hinchliffe, David
Connarty, Michael Hoey, Kate
Cook, Frank (Stockton N) Hogg, Norman (Cumbernauld)
Cook, Robin (Livingston) Home Robertson, John
Corbett, Robin Hood, Jimmy
Corbyn, Jeremy Hoon, Geoffrey
Corston, Ms Jean Howarth, George (Knowsley N)
Cousins, Jim Howells, Dr. Kim (Pontypridd)
Cox, Tom Hoyle, Doug
Cryer, Bob Hughes, Kevin (Doncaster N)
Cunningham, Jim (Covy SE) Hughes, Robert (Aberdeen N)
Cunningham, Rt Hon Dr John Hughes, Roy (Newport E)
Dalyell, Tam Hughes, Simon (Southwark)
Darling, Alistair Hutton, John
Davidson, Ian Illsley, Eric
Davies, Bryan (Oldham C'tral) Ingram, Adam
Davies, Rt Hon Denzil (Llanelli) Jackson, Glenda (H'stead)
Davies, Ron (Caerphilly) Jackson, Helen (Shef'ld, H)
Davis, Terry (B'ham, H'dge H'l) Jamieson, David
Denham, John Janner, Greville
Dewar, Donald Jones, Barry (Alyn and D'side)
Dixon, Don Jones, Jon Owen (Cardiff C)
Jones, Lynne (B'ham S O) Pike, Peter L.
Jones, Martyn (Clwyd, SW) Pope, Greg
Jowell, Tessa Powell, Ray (Ogmore)
Kaufman, Rt Hon Gerald Prentice, Ms Bridget (Lew'm E)
Keen, Alan Prentice, Gordon (Pendle)
Kennedy, Jane (Lpool Brdgn) Prescott, John
Khabra, Piara S. Primarolo, Dawn
Kilfoyie, Peter Purchase, Ken
Kinnock, Rt Hon Neil (Islwyn) Quin, Ms Joyce
Kirkhope, Timothy Randall, Stuart
Leighton, Ron Raynsford, Nick
Lestor, Joan (Eccles) Reid, Dr John
Lewis, Terry Rendel, David
Litherland, Robert Robertson, George (Hamilton)
Livingstone, Ken Robinson, Geoffrey (Co'try NW)
Lloyd, Tony (Stretford) Roche, Mrs. Barbara
Llwyd, Elfyn Rooker, Jeff
Loyden, Eddie Rooney, Terry
Lynne, Ms Liz Ross, Ernie (Dundee W)
McAllion, John Rowlands, Ted
McAvoy, Thomas Ruddock, Joan
Macdonald, Calum Sedgemore, Brian
McFall, John Sheerman, Barry
McKelvey, William Sheldon, Rt Hon Robert
Mackinlay, Andrew Shore, Rt Hon Peter
McLeish, Henry Short, Clare
McMaster, Gordon Skinner, Dennis
McWilliam, John Smith, Andrew (Oxford E)
Madden, Max Smith, C. (Isl'ton S & F'sbury)
Mahon, Alice Smith, Rt Hon John (M'kl'ds E)
Mandelson, Peter Smith, Llew (Blaenau Gwent)
Marek, Dr John Snape, Peter
Marshall, David (Shettleston) Soley, Clive
Marshall, Jim (Leicester, S) Spearing, Nigel
Martin, Michael J. (Springburn) Spellar, John
Martlew, Eric Squire, Rachel (Dunfermline W)
Maxton, John Steel, Rt Hon Sir David
Meacher, Michael Steinberg, Gerry
Meale, Alan Stevenson, George
Michael, Alun Stott, Roger
Michie, Bill (Sheffield Heeley) Straw, Jack
Michie, Mrs Ray (Argyll Bute) Taylor, Mrs Ann (Dewsbury)
Milburn, Alan Taylor, Matthew (Truro)
Miller, Andrew Turner, Dennis
Mitchell, Austin (Gt Grimsby) Tyler, Paul
Moonie, Dr Lewis Walker, Rt Hon Sir Harold
Morgan, Rhodri Wallace, James
Morley, Elliot Wardell, Gareth (Gower)
Morris, Rt Hon A. (Wy'nshawe) Wareing, Robert N
Morris, Estelle (B'ham Yardley) Watson, Mike
Morris, Rt Hon J. (Aberavon) Welsh, Andrew
Mowlam, Marjorie Wicks, Malcolm
Mudie, George Wigley, Dafydd
Mullin, Chris Williams, Rt Hon Alan (Sw'n W)
Murphy, Paul Williams, Alan W (Carmarthen)
Oakes, Rt Hon Gordon Wilson, Brian
O'Brien, Michael (N W'kshire) Winnick, David
O'Brien, William (Normanton) Worthington, Tony
O'Hara, Edward Wray, Jimmy
Olner, William Wright, Dr Tony
O'Neill, Martin Young, David (Bolton SE)
Orme, Rt Hon Stanley
Parry, Robert Tellers for the Ayes:
Patchett, Terry Mr. Jack Thompson and Mr. Jim Dowd.
Pendry, Tom
Pickthall, Colin
Ainsworth, Peter (East Surrey) Atkinson, Peter (Hexham)
Aitken, Jonathan Baker, Nicholas (Dorset North)
Alexander, Richard Baldry, Tony
Alison, Rt Hon Michael (Selby) Banks, Matthew (Southport)
Amess, David Banks, Robert (Harrogate)
Arbuthnot, James Bates, Michael
Arnold, Jacques (Gravesham) Batiste, Spencer
Arnold, Sir Thomas (Hazel Grv) Bellingham, Henry
Ashby, David Bendall, Vivian
Aspinwall, Jack Beresford, Sir Paul
Atkins, Robert Biffen, Rt Hon John
Atkinson, David (Bour'mouth E) Body, Sir Richard
Bonsor, Sir Nicholas Gardiner, Sir George
Booth, Hartley Garnier, Edward
Boswell, Tim Gill, Christopher
Bottomley, Peter (Eltham) Gillan, Cheryl
Bottomley, Rt Hon Virginia Goodlad, Rt Hon Alastair
Bowden, Andrew Goodson-Wickes, Dr Charles
Bowis, John Gorman, Mrs Teresa
Boyson, Rt Hon Sir Rhodes Gorst, John
Brandreth, Gyles Grant, Sir A. (Cambs SW)
Brazier, Julian Greenway, Harry (Ealing N)
Bright, Graham Greenway, John (Ryedale)
Brooke, Rt Hon Peter Griffiths, Peter (Portsmouth, N)
Brown, M. (Brigg & Cl'thorpes) Grylls, Sir Michael
Browning, Mrs. Angela Gummer, Rt Hon John Selwyn
Bruce, Ian (S Dorset) Hague, William
Budgen, Nicholas Hamilton, Rt Hon Sir Archie
Burns, Simon Hamilton, Neil (Tatton)
Burt, Alistair Hampson, Dr Keith
Butler, Peter Hanley, Jeremy
Butterfill, John Hannam, Sir John
Carlisle, John (Luton North) Hargreaves, Andrew
Carlisle, Kenneth (Lincoln) Harris, David
Carrington, Matthew Haselhurst, Alan
Carttiss, Michael Hawkins, Nick
Cash, William Hawksley, Warren
Channon, Rt Hon Paul Hayes, Jerry
Churchill, Mr Heald, Oliver
Clappison, James Heath, Rt Hon Sir Edward
Clark, Dr Michael (Rochford) Heathcoat-Amory, David
Clarke, Rt Hon Kenneth (Ruclif) Hendry, Charles
Clifton-Brown, Geoffrey Heseltine, Rt Hon Michael
Coe, Sebastian Hicks, Robert
Colvin, Michael Higgins, Rt Hon Sir Terence L.
Congdon, David Hill, James (Southampton Test)
Coombs, Anthony (Wyre For'st) Hogg, Rt Hon Douglas (G'tham)
Coombs, Simon (Swindon) Horam, John
Cope, Rt Hon Sir John Hordern, Rt Hon Sir Peter
Couchman, James Howard, Rt Hon Michael
Cran, James Howarth, Alan (Strat'rd-on-A)
Currie, Mrs Edwina (S D'by'ire) Howell, Rt Hon David (G'dford)
Curry, David (Skipton & Ripon) Howell, Sir Ralph (N Norfolk)
Davies, Quentin (Stamford) Hughes Robert G. (Harrow W)
Davis, David (Boothferry) Hunt, Rt Hon David (Wirral W)
Day, Stephen Hunt, Sir John (Ravensbourne)
Deva, Nirj Joseph Hunter, Andrew
Devlin, Tim Jack, Michael
Dickens, Geoffrey Jackson, Robert (Wantage)
Dicks, Terry Jenkin, Bernard
Dorrell, Stephen Jessel, Toby
Douglas-Hamilton, Lord James Johnson Smith, Sir Geoffrey
Dover, Den Jones, Gwilym (Cardiff N)
Duncan, Alan Jones, Robert B. (W Hertfdshr)
Duncan-Smith, Iain Jopling, Rt Hon Michael
Dunn, Bob Key, Robert
Durant, Sir Anthony Kilfedder, Sir James
Dykes, Hugh King, Rt Hon Tom
Eggar, Tim Kirkhope, Timothy
Elletson, Harold Knapman, Roger
Emery, Rt Hon Sir Peter Knight, Mrs Angela (Erewash)
Evans, Jonathan (Brecon) Knight, Greg (Derby N)
Evans, Nigel (Ribble Valley) Knight, Dame Jill (Bir'm E'stn)
Evans, Roger (Monmouth) Knox, Sir David
Evennett, David Kynoch, George (Kincardine)
Faber, David Lait, Mrs Jacqui
Fabricant, Michael Lamont, Rt Hon Norman
Fairbairn, Sir Nicholas Lang, Rt Hon Ian
Fenner, Dame Peggy Lawrence, Sir Ivan
Field, Barry (Isle of Wight) Legg, Barry
Fishburn, Dudley Leigh, Edward
Forman, Nigel Lester, Jim (Broxtowe)
Forsyth, Michael (Stirling) Lidington, David
Forth, Eric Lightbown, David
Fowler, Rt Hon Sir Norman Lilley, Rt Hon Peter
Fox, Dr Liam (Woodspring) Lloyd, Rt Hon Peter (Fareham)
Fox, Sir Marcus (Shipley) Lord, Michael
Freeman, Rt Hon Roger Luff, Peter
French, Douglas Lyell, Rt Hon Sir Nicholas
Fry, Sir Peter MacGregor, Rt Hon John
Gale, Roger MacKay, Andrew
Gallie, Phil Maclean, David
McLoughlin, Patrick Shersby, Michael
McNair-Wilson, Sir Patrick Sims, Roger
Madel, Sir David Skeet, Sir Trevor
Maitland, Lady Olga Smith, Sir Dudley (Warwick)
Malone, Gerald Soames, Nicholas
Mans, Keith Speed, Sir Keith
Marland, Paul Spencer, Sir Derek
Marlow, Tony Spicer, Sir James (W Dorset)
Marshall, John (Hendon S) Spicer, Michael (S Worcs)
Marshall, Sir Michael (Arundel) Spink, Dr Robert
Mates, Michael Spring, Richard
Mawhinney, Rt Hon Dr Brian Sproat, Iain
Mayhew, Rt Hon Sir Patrick Squire, Robin (Hornchurch)
Mellor, Rt Hon David Stanley, Rt Hon Sir John
Merchant, Piers Steen, Anthony
Mills, Iain Stephen, Michael
Mitchell, Andrew (Gedling) Stern, Michael
Mitchell, Sir David (Hants NW) Stewart, Allan
Moate, Sir Roger Streeter, Gary
Monro, Sir Hector Sumberg, David
Montgomery, Sir Fergus Sweeney, Walter
Moss, Malcolm Sykes, John
Nelson, Anthony Tapsell, Sir Peter
Neubert, Sir Michael Taylor, Ian (Esher)
Newton, Rt Hon Tony Taylor, John M. (Solihull)
Nicholls, Patrick Taylor, Sir Teddy (Southend, E)
Nicholson, David (Taunton) Temple-Morris, Peter
Nicholson, Emma (Devon West) Thomason, Roy
Norris, Steve Thompson, Sir Donald (C'er V)
Onslow, Rt Hon Sir Cranley Thompson, Patrick (Norwich N)
Oppenheim, Phillip Thurnham, Peter
Ottaway, Richard Townend, John (Bridlington)
Page, Richard Townsend, Cyril D. (Bexl'yh'th)
Paice, James Tracey, Richard
Patnick, Irvine Tredinnick, David
Patten, Rt Hon John Trend, Michael
Pattie, Rt Hon Sir Geoffrey Twinn, Dr Ian
Pawsey, James Vaughan, Sir Gerard
Peacock, Mrs Elizabeth Viggers, Peter
Pickles, Eric Waldegrave, Rt Hon William
Porter, Barry (Wirral S) Walden, George
Porter, David (Waveney) Walker, Bill (N Tayside)
Portillo, Rt Hon Michael Waller, Gary
Rathbone, Tim Ward, John
Redwood, Rt Hon John Wardle, Charles (Bexhill)
Renton, Rt Hon Tim Waterson, Nigel
Richards, Rod Watts, John
Riddick, Graham Wells, Bowen
Rifkind, Rt Hon. Malcolm Wheeler, Rt Hon Sir John
Robathan, Andrew Whitney, Ray
Robertson, Raymond (Ab'd'n S) Whittingdale, John
Robinson, Mark (Somerton) Widdecombe, Ann
Roe, Mrs Marion (Broxbourne) Wiggin, Sir Jerry
Rowe, Andrew (Mid Kent) Wilkinson, John
Rumbold, Rt Hon Dame Angela Willetts, David
Ryder, Rt Hon Richard Wilshire, David
Sackville, Tom Wolfson, Mark
Sainsbury, Rt Hon Tim Wood, Timothy
Scott, Rt Hon Nicholas Yeo, Tim
Shaw, David (Dover) Young, Rt Hon Sir George
Shaw, Sir Giles (Pudsey)
Shephard, Rt Hon Gillian Tellers for the Noes:
Shepherd, Colin (Hereford) Mr. Sydney Chapman and
Shepherd, Richard (Aldridge) Mr. Derek Conway.

Question accordingly negatived.

Question, that the proposed words be there added, put forthwith pursuant to standing Order No.30 (Question on amendments):—

The house divided:Ayes 306, Noes 245

Division No. 147] [10.13 pm
Ainsworth, Peter (East Surrey) Arnold, Jacques (Gravesham)
Aitken, Jonathan Arnold, Sir Thomas (Hazel Grv)
Alexander, Richard Ashby, David
Alison, Rt Hon Michael (Selby) Aspinwall, Jack
Amess, David Atkins, Robert
Arbuthnot, James Atkinson, David (Bour'mouth E)
Atkinson, Peter (Hexham) Fishburn, Dudley
Baker, Nicholas (Dorset North) Forman, Nigel
Baldry, Tony Forsyth, Michael (Stirling)
Banks, Matthew (Southport) Forth, Eric
Banks, Robert (Harrogate) Fowler, Rt Hon Sir Norman
Bates, Michael Fox, Dr Liam (Woodspring)
Batiste, Spencer Fox, Sir Marcus (Shipley)
Bellingham, Henry Freeman, Rt Hon Roger
Bendall, Vivian French, Douglas
Beresford, Sir Paul Fry, Sir Peter
Biffen, Rt Hon John Gale, Roger
Body, Sir Richard Gallie, Phil
Bonsor, Sir Nicholas Gardiner, Sir George
Booth, Hartley Garnier, Edward
Boswell, Tim Gill, Christopher
Bottomley, Peter (Eltham) Gillan, Cheryl
Bottomley, Rt Hon Virginia Goodlad, Rt Hon Alastair
Bowden, Andrew Goodson-Wickes, Dr Charles
Bowis, John Gorman, Mrs Teresa
Boyson, Rt Hon Sir Rhodes Gorst, John
Brandreth, Gyles Grant, Sir A. (Cambs SW)
Brazier, Julian Greenway, Harry (Ealing N)
Bright, Graham Greenway, John (Ryedale)
Brooke, Rt Hon Peter Griffiths, Peter (Portsmouth, N)
Brown, M. (Brigg & Cl'thorpes) Grylls, Sir Michael
Browning, Mrs. Angela Gummer, Rt Hon John Selwyn
Bruce, Ian (S Dorset) Hague, William
Budgen, Nicholas Hamilton, Rt Hon Sir Archie
Burns, Simon Hamilton, Neil (Tatton)
Burt, Alistair Hampson, Dr Keith
Butler, Peter Hanley, Jeremy
Butterfill, John Hannam, Sir John
Carlisle, John (Luton North) Hargreaves, Andrew
Carlisle, Kenneth (Lincoln) Harris, David
Carrington, Matthew Haselhurst, Alan
Carttiss, Michael Hawkins, Nick
Cash, William Hawksley, Warren
Channon, Rt Hon Paul Hayes, Jerry
Churchill, Mr Heald, Oliver
Clappison, James Heath, Rt Hon Sir Edward
Clark, Dr Michael (Rochford) Heathcoat-Amory, David
Clarke, Rt Hon Kenneth (Ruclif) Hendry, Charles
Clifton-Brown, Geoffrey Heseltine, Rt Hon Michael
Coe, Sebastian Hicks, Robert
Colvin, Michael Higgins, Rt Hon Sir Terence L.
Congdon, David Hill, James (Southampton Test)
Coombs, Anthony (Wyre For'st) Hogg, Rt Hon Douglas (G'tham)
Coombs, Simon (Swindon) Horam, John
Cope, Rt Hon Sir John Hordern, Rt Hon Sir Peter
Couchman, James Howard, Rt Hon Michael
Cran, James Howarth, Alan (Strat'rd-on-A)
Currie, Mrs Edwina (S D'by'ire) Howell, Rt Hon David (G'dford)
Curry, David (Skipton & Ripon) Howell, Sir Ralph (N Norfolk)
Davies, Quentin (Stamford) Hughes Robert G. (Harrow W)
Davis, David (Boothferry) Hunt, Rt Hon David (Wirral W)
Day, Stephen Hunt, Sir John (Ravensbourne)
Deva, Nirj Joseph Hunter, Andrew
Devlin, Tim Jack, Michael
Dickens, Geoffrey Jackson, Robert (Wantage)
Dicks, Terry Jenkin, Bernard
Dorrell, Stephen Jessel, Toby
Douglas-Hamilton, Lord James Johnson Smith, Sir Geoffrey
Dover, Den Jones, Gwilym (Cardiff N)
Duncan, Alan Jones, Robert B. (W Hertfdshr)
Duncan-Smith, Iain Jopling, Rt Hon Michael
Dunn, Bob Key, Robert
Durant, Sir Anthony Kilfedder, Sir James
Dykes, Hugh King, Rt Hon Tom
Eggar, Tim Kirkhope, Timothy
Elletson, Harold Knapman, Roger
Emery, Rt Hon Sir Peter Knight, Mrs Angela (Erewash)
Evans, Jonathan (Brecon) Knight, Greg (Derby N)
Evans, Nigel (Ribble Valley) Knox, Sir David
Evans, Roger (Monmouth) Kynoch, George (Kincardine)
Evennett, David Lait, Mrs Jacqui
Faber, David Lamont, Rt Hon Norman
Fabricant, Michael Lang, Rt Hon Ian
Fairbairn, Sir Nicholas Lawrence, Sir Ivan
Fenner, Dame Peggy Legg, Barry
Field, Barry (Isle of Wight) Leigh, Edward
Lester, Jim (Broxtowe) Shaw, David (Dover)
Lidington, David Shaw, Sir Giles (Pudsey)
Lightbown, David Shephard, Rt Hon Gillian
Lilley, Rt Hon Peter Shepherd, Colin (Hereford)
Lloyd, Rt Hon Peter (Fareham) Shepherd, Richard (Aldridge)
Lord, Michael Shersby, Michael
Luff, Peter Sims, Roger
Lyell, Rt Hon Sir Nicholas Skeet, Sir Trevor
MacGregor, Rt Hon John Smith, Sir Dudley (Warwick)
MacKay, Andrew Soames, Nicholas
Maclean, David Speed, Sir Keith
McLoughlin, Patrick Spencer, Sir Derek
McNair-Wilson, Sir Patrick Spicer, Sir James (W Dorset)
Madel, Sir David Spicer, Michael (S Worcs)
Maitland, Lady Olga Spink, Dr Robert
Malone, Gerald Spring, Richard
Mans, Keith Sproat, Iain
Marland, Paul Squire, Robin (Hornchurch)
Marlow, Tony Stanley, Rt Hon Sir John
Marshall, John (Hendon S) Steen, Anthony
Marshall, Sir Michael (Arvndel) Stephen, Michael
Mawhinney, Rt Hon Dr Brian Stern, Michael
Mayhew, Rt Hon Sir Patrick Stewart, Allan
Mellor, Rt Hon David Streeter, Gary
Merchant, Piers Sumberg, David
Mills, Iain Sweeney, Walter
Mitchell, Andrew (Gedling) Sykes, John
Mitchell, Sir David (Hants NW) Tapsell, Sir Peter
Moate, Sir Roger Taylor, Ian (Esher)
Monro, Sir Hector Taylor, John M. (Solihull)
Montgomery, Sir Fergus Taylor, Sir Teddy (Southend, E)
Moss, Malcolm Temple-Morris, Peter
Nelson, Anthony Thomason, Roy
Neubert, Sir Michael Thompson, Sir Donald (C'er V)
Newton, Rt Hon Tony Thompson, Patrick (Norwich N)
Nicholls, Patrick Thurnham, Peter
Nicholson, David (Taunton) Townend, John (Bridlington)
Nicholson, Emma (Devon West) Townsend, Cyril D. (Bexl'yh'th)
Norris, Steve Tracey, Richard
Onslow, Rt Hon Sir Cranley Tredinnick, David
Oppenheim, Phillip Trend, Michael
Ottaway, Richard Twinn, Dr Ian
Page, Richard Vaughan, Sir Gerard
Paice, James Viggers, Peter
Patnick, Irvine Waldegrave, Rt Hon William
Patten, Rt Hon John Walden, George
Pattie, Rt Hon Sir Geoffrey Walker, Bill (N Tayside)
Pawsey, James Waller, Gary
Peacock, Mrs Elizabeth Ward, John
Pickles, Eric Wardle, Charles (Bexhill)
Porter, Barry (Wirral S) Waterson, Nigel
Porter, David (Waveney) Watts, John
Portillo, Rt Hon Michael Wells, Bowen
Rathbone, Tim Wheeler, Rt Hon Sir John
Redwood, Rt Hon John Whitney, Ray
Renton, Rt Hon Tim Whittingdale, John
Richards, Rod Widdecombe, Ann,
Riddick, Graham Wiggin, Sir Jerry
Rifkind, Rt Hon. Malcolm Wilkinson, John
Robathan, Andrew Willetts, David
Robertson, Raymond (Ab'd'n S) Wilshire, David
Robinson, Mark (Somerton) Wolfson, Mark
Roe, Mrs Marion (Broxbourne) Wood, Timothy
Rowe, Andrew (Mid Kent) Yeo, Tim
Rumbold, Rt Hon Dame Angela Young, Rt Hon Sir George
Ryder, Rt Hon Richard
Sackville, Tom Tellers for the Ayes:
Sainsbury, Rt Hon Tim Mr. Derek Conway and Mr. Sydney Chapman.
Scott, Rt Hon Nicholas
Abbott, Ms Diane Austin-Walker, John
Adams, Mrs Irene Banks, Tony (Newham NW)
Ainger, Nick Barnes, Harry
Ainsworth, Robert (Cov'try NE) Barron, Kevin
Allen, Graham Battle, John
Anderson, Donald (Swansea E) Bayley, Hugh
Anderson, Ms Janet (Ros'dale) Beckett, Rt Hon Margaret
Armstrong, Hilary Beith, Rt Hon A. J.
Ashton, Joe Benn, Rt Hon Tony
Bennett, Andrew F. Grocott, Bruce
Benton, Joe Gunnell, John
Bermingham, Gerald Hain, Peter
Berry, Dr. Roger Hall, Mike
Betts, Clive Hanson, David
Blair, Tony Hardy, Peter
Boateng, Paul Harman, Ms Harriet
Boyes, Roland Harvey, Nick
Bradley, Keith Hill, Keith (Streatham)
Bray, Dr Jeremy Hinchliffe, David
Brown, N. (N'c'tle upon Tyne E) Hogg, Norman (Cumbernauld)
Byers, Stephen Home Robertson, John
Caborn, Richard Hood, Jimmy
Callaghan, Jim Hoon, Geoffrey
Campbell, Mrs Anne (C'bridge) Howarth, George (Knowsley N)
Campbell, Menzies (Fife NE) Howells, Dr. Kim (Pontypridd)
Campbell, Ronnie (Blyth V) Hoyle, Doug
Campbell-Savours, D. N. Hughes, Kevin (DoncasterN)
Canavan, Dennis Hughes, Robert (Aberdeen N)
Cann, Jamie Hughes, Roy (Newport E)
Carlile, Alexander (Montgomry) Hughes, Simon (Southwark)
Chisholm, Malcolm Hutton, John
Clapham, Michael Illsley, Eric
Clarke, Tom (Monklands W) Ingram, Adam
Clwyd, Mrs Ann Jackson, Glenda (H'stead)
Coffey, Ann Janner, Greville
Cohen, Harry Jones, Barry (Alyn and D'side)
Connarty, Michael Jones, Lynne (B'ham S O)
Cook, Frank (Stockton N) Jones, Martyn (Clwyd, SW)
Cook, Robin (Livingston) Jowell, Tessa
Corbyn, Jeremy Kaufman, Rt Hon Gerald
Corston, Ms Jean Keen, Alan
Cousins, Jim Kennedy, Jane (Lpool Brdgn)
Cox, Tom Khabra, Piara S.
Cryer, Bob Kilfoyle, Peter
Cunningham, Jim (Covy SE) Kinnock, Rt Hon Neil (Islwyn)
Cunningham, Rt Hon Dr John Kirkwood, Archy
Dalyell, Tarn Leighton, Ron
Darling, Alistair Lestor, Joan (Eccles)
Davidson, Ian Lewis, Terry
Davies, Bryan (Oldham C'tral) Litheriand, Robert
Davies, Ron (Caerphilly) Livingstone, Ken
Davis, Terry (B'ham, H'dge H'l) Llwyd, Elfyn
Denham,John Loyden, Eddie
Dewar, Donald Lynne, Ms Liz
Dixon, Don McAllion, John
Dobson, Frank McAvoy, Thomas
Donohoe, Brian H. Macdonald, Calum
Dunnachie, Jimmy McFall, John
Dunwoody, Mrs Gwyneth McKelvey, William
Eagle, Ms Angela Mackinlay, Andrew
Eastham, Ken McLeish, Henry
Enright, Derek McMaster, Gordon
Etherington, Bill McWilliam, John
Evans, John (St Helens N) Madden, Max
Ewing, Mrs Margaret Mahon, Alice
Fatchett, Derek Mandelson, Peter
Faulds, Andrew Marek, Dr John
Field, Frank (Birkenhead) Marshall, David (Shettleston)
Fisher, Mark Martin, Michael J. (Springburn)
Flynn, Paul Martlew, Eric
Foster, Rt Hon Derek Maxton, John
Foster, Don (Bath) Meacher, Michael
Foulkes, George Meale, Alan
Fraser, John Michael, Alun
Fyfe, Maria Michie, Bill (Sheffield Heeley)
Galloway, George Michie, Mrs Ray (Argyll Bute)
Gapes, Mike Milburn, Alan
Garrett, John Miller, Andrew
George, Bruce Moonie, Dr Lewis
Gerrard, Neil Morgan, Rhodri
Gilbert, Rt Hon Dr John Morley, Elliot
Godman, Dr Norman A. Morris, Rt Hon A. (Wy'nshawe)
Godsiff, Roger Morris, Rt Hon J. (Aberavon)
Golding, Mrs Llin Mowlam, Marjorie
Gordon, Mildred Mudie, George
Graham, Thomas Mullin, Chris
Grant, Bernie (Tottenham) Murphy, Paul
Griffiths, Nigel (Edinburgh S) Oakes, Rt Hon Gordon
Griffiths, Win (Bridgend) O'Brien, Michael (N W'kshire)
O'Brien, William (Normanton) Smith, C. (Isl'ton S & F'sbury)
O'Hara, Edward Smith, Rt Hon John (M'kl'ds E)
Olner, William Smith, Llew (Blaenau Gwent)
O'Neill, Martin Snaps, Peter
Orme, Rt Hon Stanley Soley, Clive
Parry, Robert Spearing, Nigel
Patchett, Terry Spellar, John
Pendry, Tom Squire, Rachel (Dunfermline W)
Pickthall, Colin Steel, Rt Hon Sir David
Pike, Peter L. Steinberg, Gerry
Powell, Ray (Ogmore) Stevenson, George
Prentice, Ms Bridget (Lew'm E) Stott, Roger
Prentice, Gordon (Pendle) Straw, Jack
Prescott, John Taylor, Mrs Ann (Dewsbury)
Primarolo, Dawn Taylor, Matthew (Truro)
Purchase, Ken Turner, Dennis
Quin, Ms Joyce Tyler, Paul
Randall, Stuart Walker, Rt Hon Sir Harold
Raynsford, Nick Wallace, James
Reid, Dr John Warden, Gareth (Gower)
Rendel, David Wareing, Robert N
Robertson, George (Hamilton) Watson, Mike
Robinson, Geoffrey (Co'try NW) Welsh, Andrew
Roche, Mrs. Barbara Wicks, Malcolm
Rooker, Jeff Wigley, Dafydd
Rooney, Terry Williams, Rt Hon Alan (Sw'n W)
Ross, Ernie (Dundee W) Williams, Alan W (Carmarthen)
Rowlands, Ted Wilson, Brian
Ruddock, Joan Winnick, David
Salmond, Alex Worthington, Tony
Sedgemore, Brian Wray, Jimmy
Sheerman, Barry
Sheldon, Rt Hon Robert Tellers for the Noes:
Shore, Rt Hon Peter Mr. Jack Thompson and Mr. Jim Dowd.
Skinner, Dennis
Smith, Andrew (Oxford E)

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House congratulates the Government on the reduction by 36 per cent. in the numbers of Non-Departmental Public Bodies over the last fourteen years as well as on the gains in value for money that have been achieved through the introduction of compulsory competitive tendering in local government and the Competing for Quality initiative in Whitehall; rejects the proposition that contracting for services implies loss of accountability; welcomes the continuous improvement in the quality, value for money and responsiveness of public services not least through the implementation of the principles of the Citizen's Charter; notes that this Government's establishment of the Audit Commission and the increased powers and independence given to the Comptroller and Auditor General have led to more effective control of fraud and waste; and applauds the Government's continuing commitment to high standards in public life.

Forward to