§ The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave)
With permission, Madam Speaker, I wish to make a statement on the White Paper on the civil service, published today.
It is nearly 150 years since the Northcote-Trevelyan report first laid out the principles of a professional civil service, accountable through Ministers to Parliament, recruited on merit, politically impartial and dominated by a high ideal of the value of public service. Over the years since, the civil service has seen the demands laid upon it change in ways that could not have been imagined then. But the core principles established at that time have remained unaltered. They have served the country well; they continue to do so.
Today's White Paper therefore reaffirms those same fundamental principles. These principles help us to live in a decent society, but they have economic value, too. No one should underestimate the advantage we get from the justified reputation we have as a country in which our public service is honest, competent and apolitical.
None the less, no organisation can stand still in changing times. The public rightly expect to see continuing improvements in the standards of service in the public sector within the resources which can be afforded. That is why this Government have introduced a series of wide-ranging reforms, now brought together under the banner of the citizens charter, aimed at delivering better service ever more efficiently. These include the financial management initiative, the next steps programme, the efficiency reviews and the "Competing for Quality" programme.
I believe that the House should pay tribute to the way the civil service has handled these and other initiatives. They have already produced marked increases in both performance and efficiency. The size of the civil service is at its lowest level since the second world war, and the new structures are showing considerable gains in efficiency. The White Paper published today sets out how the Government see these reforms being taken forward and draws together the implications for the future of the civil service.
One central principle of management unites all these reforms—that of delegation to and within properly accountable organisations. We should now take further steps in that same direction, building on what we know works, rather than going off in a new direction.
But it is a fact that the most radical change so far has been in those parts of the civil service, much the largest in terms of numbers, which provide service directly to the public. The role of departmental headquarters and of the Cabinet Office and the Treasury now needs to change, too. The central role should be to set tough targets and to monitor performance on the basis of better information than we have at present. But staff throughout the civil service should be given the power to manage and operate in ways that best meet their particular tasks and needs, rather than within a single, central blueprint, adequate for all, but well fitted to none. We therefore intend to carry the next steps process further.
The Government propose that Departments should take greater responsibility for deciding their organisational structures, the pay of their staff and the best mix of 988 efficiency measures to meet the never-ending pressure to raise standards within tight running costs. Departments themselves should judge, for example, how best to use privatisation, contracting out and market testing. Centrally driven initiatives have shown in recent years how more competition and choice improves quality and reduces costs: Departments themselves must now take these well-established policies forward if we are to see the full benefit from them. The central Departments should continue to measure, monitor and report to Parliament, but with less second guessing of Departments' plans.
To do that, we need better information systems and more modern accounting practices. The Prime Minister has therefore asked the efficiency unit to conduct a scrutiny on management information systems and my right hon. and learned Friend the Chancellor of the Exchequer is publishing today a Green Paper on resource accounting and budgeting. The Green Paper paves the way for important reforms of the way in which we account for public money and opens up the possibility of changes in the way in which the Government plan their spending, both of which will complement the changes that I am proposing in the White Paper.
Departments will be given the freedom to determine their own management structures at all levels matched to their own needs. We expect them to be tauter and flatter than now. The Government propose to extend the delegation of pay and grading—which at present covers around 60 per cent. of the civil service—to cover all civil servants below the senior civil service. I shall return to pay arrangements for the latter in a moment.
The senior civil service needs to support both the collective responsibility of Government and the particular responsibilities of Departments, and to underpin both policy making and high-quality service delivery. But it, too, cannot be immune from change. It needs changing qualities and skills to match its changing tasks. The Government published an efficiency unit report on those issues last winter, known as the Oughton report, and the White Paper includes the Government's response. The Government accept the efficiency unit's main recommendations, but propose additional changes. Our main conclusions are as follows.
To strengthen cohesion across the civil service and bring in all those with substantial management responsibilities, the Government propose to create a new senior civil service, including those broadly down to the present grade 5 level. It will include up to 3,500 people.
There should be more interchange between this senior civil service—and, indeed, the rest of the civil service—and outside employees. Open competition should become a more normal part of the process for selecting people for senior appointments. It need not be used in every case, but it should be considered in every case. Such competitions must be superintended, as now, by the Civil Service Commissioners, independently of Ministers, to guard against the possibility of politicisation. I am publishing today, alongside the White Paper, a report on the future role of the commissioners. I myself believe that if the civil service is as good as it should be at training and career development, most senior posts are likely still to be held by insiders, as they would be in most big firms; but we should set no targets one way or the other.
Next, the Government propose to introduce explicit written employment contracts for members of the new senior civil service. For the great majority, they will 989 provide for employment for an indefinite term, but with specified periods of notice. Fixed-term and rolling contracts would also be used as appropriate.
As figures in the White Paper show, it is a myth that the civil service is an organisation in which people serve as a matter of course until retiring age. Substantial numbers of senior staff have left early in recent years and that is likely to continue.
Finally, the White Paper proposes that a new, more flexible pay system should be introduced for this group. There should be a range for permanent secretaries' pay, with the positions of individuals determined by a remuneration committee with a majority of non-civil service members. Below that, we propose a system of wider, overlapping pay bands broadly linked to levels of responsibility, with progression based on performance, giving more room for manoeuvre to Departments to change their structure to fit their needs. As a first step, the Government will implement the wider pay ranges recommended by the Senior Salaries Review Body for the present grades 2 and 3 and will ask the review body to recommend a pay range for permanent secretaries. Those proposals will, in time, allow for greater differentiation in individuals' pay within the overall pay bill. No immediate pay increases are entailed.
The proposals for greater delegation to Departments and reform of the senior civil service represent a considerable further challenge for the civil service. We are seeking to raise standards of service within tight control of running costs. Staff numbers will continue to fall, from 533,000 at present to significantly below 500,000, with reductions at all levels. Wherever possible, that will be achieved through natural wastage and by voluntary departures. From the autumn of this year, the Treasury will give special assistance to Departments with any additional costs.
The Government believe that the civil service is fully capable of achieving what we have asked of it. It will be helped to do that by the greater flexibilities and the management changes that I have announced, against the background of the reaffirmation of the old strengths and values which underpin the civil service, which the Government have reaffirmed today, and with which, I believe, the whole House will concur. The civil service must continue to offer attractive and exciting careers to talented people who wish to serve their country in some of our most important and challenging jobs and it will be helped to do so by up-to-date organisations and structures.
The civil service has a unique role maintaining our unwritten constitution. It does not belong to one Government or party. The Government, therefore, plan to consult Opposition parties as well as others with an interest in the proposals that I have outlined today. We shall, of course, consider carefully the forthcoming report from the Treasury and Civil Service Select Committee.
The Government's objective in publishing the White Paper is to map a way forward for the civil service to the end of the century and beyond. The result will be a smaller civil service, more flexible in organisation, better able to respond to changing tasks, properly rewarded on the basis of responsibilities and performance and offering challenging careers for both staff and managers with a reaffirmed commitment to the unchanging principle of public service. I commend the White Paper to the House.
§ Mr. Michael Meacher (Oldham, West)
The statement is a menu for the accelerated privatisation of the civil 990 service, which threatens to destroy the constitutional principles on which the civil service has rested for 150 years since Northcote-Trevelyan. Those principles include ministerial accountability, the unity of the civil service and the public service ethic as the standard for civil servants' actions. All of them will be undermined by the statement.
The right hon. Gentleman is squeezing out around 50,000 jobs by cutting the running costs of Departments. Is not that a wholly arbitrary exercise, in which he has abdicated his responsibility for the overall direction and general goals of the civil service? Is not he doing that because market testing has manifestly failed, even though he has constantly exaggerated the forecasted savings from the exercise?
The right hon. Gentleman said that centralised pay bargaining in Whitehall would end. Is not he reneging on long-term civil service pay agreements into which the Government solemnly and unequivocally entered two years ago? Will he tell the House how many hundreds more civil servants will be needed to negotiate pay agreements in each Department? Does he recognise that there will be a massive duplication of bureaucracy with the creation of at least 150 separate pay-bargaining units, and that 3,000 civil servants must be trained for that? Currently it is done by a mere 40 in the Treasury.
Will this be a repetition of what happened two years ago when the Government introduced performance-related pay, when nine Government Departments individually approached Andersen Consulting and paid nine fat fees for the same advice? As for personal contracts and performance pay for the top 2,000 civil servants, how does the right hon. Gentleman propose to measure the performance of a top civil servant—by how much he pleases the Minister?
On open competition for top posts, is not it true that Ministers make the final choice of appointee and that, despite the right hon. Gentleman's denials, his proposed changes will open the way for more politicisation of the civil service, which the Government have taken too far already? Does not he recall the then Home Secretary a few years ago insisting on appointing as head of the Prisons Agency a man who had no knowledge or experience of the prison service, but whose private sector views made him ideologically sound? This Government have quangoised Britain with their own political placemen. Are they now going to do the same for the top ranks of the civil service?
Why is there no mention of equal opportunities in the civil service, with the right hon. Gentleman's retention of the elitist fast stream entry to top jobs? The real objection to this White Paper is that it has no vision. The public do have concerns about the civil service—about how Ministers increasingly rule by fiat and compromise civil servants' political neutrality; about what Pergau and the Scott inquiry reveal about the secrecy culture in Whitehall; and about the dismantling of an institution which has hitherto been the envy of the world. None of these matters which really worry the public are dealt with in the statement. It is not just a missed opportunity: it is a major backward step from the good governance of our country.
§ Mr. Waldegrave
The hon. Member for Oldham, West (Mr. Meacher), as usual, gets it almost entirely wrong. I believe that he will find that he has misjudged the White Paper and the mood of the House.
The hon. Gentleman asked, as if it were a difficult question, how we can measure the performance of senior 991 civil servants—[Interruption.]—clearly showing himself as unaware as is his hon. Friend the Member for Norwich, South (Mr. Garrett), who is misadvising him, that senior civil servants have been on performance pay for many years.
Next, the hon. Gentleman mistakenly asked whether Ministers make the final choice. That is not true. The Civil Service Commission makes the final choice. I have today published a paper—the hon. Gentleman should study it—which rightly explains the role of the commission. If it is necessary, as I believe it is, to bring in more people to the senior civil service to gain their experience, those jobs must not be politicised. It is therefore vital that the choice remains with the Civil Service Commission.
Nothing in the White Paper or in the Government's reforms changes ministerial accountability to this House, or the accountability of civil servants, through Ministers, to this House.
Typically, in a recent article, the hon. Member for Oldham, West claimed that the Government intended to reduce the numbers of civil servants to 50,000. We intend, I hope, to reduce their numbers to below 500,000—the hon. Gentleman got the decimal point wrong, just as he has got virtually everything else wrong on this occasion.
§ Mr. Robert Jackson (Wantage)
I congratulate my right hon. Friend and his advisers on the hard thinking and hard work that have gone into the White Paper.
Will the Government acknowledge that the wider recruitment and wider exchanges that they seek as between the senior civil service and the private sector will come about in practice only if pay amounts as well as pay structures in the senior civil service are made comparable with those in the private sector? Secondly, will my right hon. Friend press for an early debate in Government time, as soon as the House returns, on these important proposals?
§ Mr. Waldegrave
On the latter point, I will, of course, report to the Leader of the House what my hon. Friend has said.
Needless to say, the Select Committee is already engaged in cross-examinations on my hon. Friend's point, and I look forward to appearing before a sub-committee of the Select Committee next week to discuss it.
We believe that there should be more competition for the top jobs; that is the challenge that we offer the civil service. The other side of the coin must be that we develop the capacity over time to respond in terms of pay, so that these jobs attract a reward commensurate with the competition that they entail. That will take time. There is no overnight pay increase in the White Paper; but we need greater flexibility and wider pay bands to enable the civil service to attract its fair share of people from outside on equal terms.
§ Mr. Matthew Taylor (Truro)
The White Paper has much in it to be commended. It is important not to oppose change merely for the sake of opposing it, but the record of Ministers shows that they have often favoured change merely for its own sake, particularly in respect of privatisation.
The White Paper does not deal well enough with the worry that, with greater flexibility at senior levels of the civil service and with greater emphasis on performance 992 among those who give advice, the robust independence of the civil service will be affected. That is not addressed in the White Paper and it needs to be addressed more seriously by Ministers. The one great gaping hole—
§ Madam Speaker
Order. As the hon. Gentleman and the House have seen, a number of hon. Members are seeking to ask questions. I want questions and not statements now.
§ Mr. Taylor
There is a gaping hole in the White Paper that I would ask the Minister to address: why are the same rules, the same issues of independence and proper public appointment subject to independent scrutiny not being applied to the great growth areas of the state—the trusts, quangos and appointees subject to ministerial appointment—when the Minister places such importance on the independence of the civil service?
§ Mr. Waldegrave
The White Paper addresses head on the essential point that the hon. Gentleman fairly makes. Its entire first chapter deals with the importance of maintaining a robustly apolitical and independent civil service. I have absolutely no doubt that, should by some misfortune the Labour party or the hon. Member's party find their way into power, the civil service would serve them with exactly the same loyalty with which it has served us. Anybody who doubts that is casting an aspersion against the civil service. We reaffirm that today and I join the hon. Gentleman in reiterating its importance.
The hon. Member's second point is a real one. My right hon. Friend Secretary of State for Health has just published guidelines for the selection and conduct of trust boards and the Treasury has just republished and reinforced its guidance on appointments to non-departmental bodies. They are separate matters from the issues that we are looking at today, but they are important and should and are being addressed.
§ Mr. John Townend (Bridlington)
Will my right hon. Friend accept that any savings to the taxpayer as a result of the White Paper will be welcomed by Conservative Members, unlike the Opposition, who have no regard to the British taxpayer? He said that he hopes to reduce the civil service by some 33,000 to around 500,000. Are those all going to be saved posts or will any be contracted out? If they are all saved, that is a reduction of something like 6 per cent. in the overall head count. Does he agree that it is still rather conservative compared with the reduction in overheads that most private companies have had to make during the recession? Does he agree that our investment in information technology in the civil service has not produced the return it should have done?
§ Mr. Waldegrave
My hon. Friend is right to say that, when we look at our own organisations, we should consider the very rapid change undertaken by large organisations outside, many of which have had to undertake change quicker under the compulsion of the markets than we have achieved. None the less, I pay tribute to the civil service because it has changed fast. The fall in numbers—that is a gain in efficiency and a return for the taxpayers who pay for us all—has been faster in recent years than in the period running back to 1979, though there has been a considerable drop in numbers since then. Some jobs will be contracted out or privatised, some will go because we analyse that there is no need for the function at 993 all, and others will be go due to sheer efficiency gains. In the past 18 months, the ratio of efficiency gains to contracting out has been running at about 60:40.
§ Mr. Robert Sheldon (Ashton-under-Lyne)
Despite the right hon. Gentleman's claim that so much of the reform is apolitical, is he aware that one of its serious aspects is the way in which fixed-term appointments will be made? Who will decide, when the term ends, whether that person will be reappointed? Is that not the time when the Minister concerned can exert his own pressure? Finally, 108 members of the Government are paid for out of public funds. We are reducing the numbers of civil servants, yet the numbers of Ministers have increased year by year. Why does he not turn his attention to that?
§ Mr. Waldegrave
The latter point may be for my right hon. Friend the Prime Minister rather than being my direct responsibility. On the former point, I agree with the right hon. Gentleman. We have come down against fixed-term contracts for the generality of the new contracts that will be negotiated. They must be negotiated with the staff for the very reason that the right hon. Gentleman gives. The cliff edge might produce a sense of insecurity and it is part of an efficient and apolitical civil service to give advice to their political masters that may not be welcome; civil servants should have the confidence to do that.
§ Rev. Ian Paisley (Antrim, North)
Will this pruning and semi-privatisation of the civil service apply across the board in Northern Ireland? Will it apply to both the Northern Ireland Office and the Departments in Northern Ireland? Will the right hon. Gentleman assure the people of Northern Ireland that—contrary to pressures from Dublin—any new members of the Northern Ireland civil service will be appointed, as they are in this part of the United Kingdom, solely on the basis of merit rather than religion?
§ Mr. Waldegrave
As the hon. Gentleman well knows, the Northern Ireland civil service is a separate body; however, the principles underlying our proposals apply to it with equal force. My right hon. and learned Friend the Secretary of State for Northern Ireland will be considering how, and to what extent, they might be implemented in the particular circumstances of the Northern Ireland civil service.
The Northern Ireland civil service selects on merit, and the principles—well known to the hon. Gentleman—according to which it seeks to extend the pool from which it selects to all communities are an important part of that.
§ Mr. Giles Radice (Durham, North)
Is the Minister aware that the Select Committee will need to examine the details of the White Paper and discuss them with him? Personally, I welcome the fact that the Government have seen the need to reassert the essential values of the civil service at this time. I am also pleased that they recognise that the service is not the property of any one party, and are prepared to consult the Opposition; and that the Select Committee will have a role in considering its future.
§ Mr. Waldegrave
I am happy to reaffirm the importance of the Select Committee's work. We have explicitly stated in the White Paper that we shall await its report before reaching any final conclusions. It has taken an interest in a number of aspects—for instance, civil service Acts and statutory backing for ethical codes. I must say that 994 the hon. Gentleman seems to show more understanding of both the issues and the sense of the House than does his Front-Bench spokesman.
§ Sir Peter Tapsell (East Lindsey)
Does my right hon. Friend agree that Britain is one of the few countries in which corruption at the top levels of Government is almost unknown? That is largely due to the dedication and high integrity of senior civil servants. Is my right hon. Friend confident that introducing an increasing number of people from an entirely different ethos, and without such long training, will not lead to a lowering of standards, with serious consequences for our political life?
§ Mr. Waldegrave
I entirely agree with the first part of what my hon. Friend has said. We should be proud of the standards in our civil service. As I said in my statement, they not only make life better in this country, but provide an economic advantage: people invest here in the knowledge that the British officials with whom they will deal are not corrupt.
As for my hon. Friend's second point, let me remind him that during the war many people who entered the civil service—I think of, for instance, Roger Sherfield and Oliver Franks—greatly added to its strength. We have lost something of that since the war has become more distant. If we can widen the pool of able people who wish to serve the public by working in the civil service at some point in their careers, I do not think that that implies any lowering of standards. The great men and women who served at that time, and later, reinforce my belief.
§ Mr. Andrew Faulds (Warley, East)
Perhaps the right hon. Gentleman could have delivered his piece with a little less rattle and a little more conviction. Do the Government really intend to pursue the introduction of performance-related pay in the higher echelons of the civil service? How on earth can such performance be measured?
§ Mr. Waldegrave
I would not want to compete with the hon. Gentleman in terms of rattle. There is virtually no organisation in the world, including the British senior civil service, that does not have some measure of performance-related pay. [Interruption.] The hon. Member and the hon. Member for Oldham, West (Mr. Meacher) are decades out of date if they think that people have not been addressing these problems and solving them perfectly satisfactorily.
§ Dr. Keith Hampson (Leeds, North-West)
I notice that my right hon. Friend's statement does not refer to the Fulton report. Is not it true that the philosophy of that committee, which was established by a Labour Government, is followed by the bold and imaginative ideas that my right hon. Friend has outlined today, particularly in terms of the need for a widening of recruitment into the civil service and for greater management efficiency? In terms of the accountability of the senior civil service to the House, is it possible that the Select Committee system has some part to play in the appointment of certain members of the senior civil service?
§ Mr. Waldegrave
My hon. Friend is right that part of the important advice from the Fulton committee was that we should achieve a greater interchange and wider experience in people's careers before they reach the top of the public service. That has not happened enough, although it has happened to a considerable degree and we want it to happen more. We are abolishing one thing that was derived 995 from the Fulton report, the senior open structure down to grade 3, because we have come to the conclusion that that is too narrow a basis for the unified cross-departmental senior civil service that we need. As we need better devolution to Departments and less Treasury and Cabinet Office interference in the management of Departments, we also need to retain a capacity to move people laterally. That is why we have established the new senior civil service structure.
§ Mr. Tony Benn (Chesterfield)
The Minister's statement will require careful examination, but will he answer some questions? If power is to be devolved to civil servants in Departments who will no longer be accountable to Ministers for many aspects, is not it true that an incoming Government might regard the friends who have been brought in by this Government as wholly unsuitable and be entitled to remove them on the grounds that their performance is of a political character, quite unacceptable to the decision reached by the electors, which normally removes the Ministers who run the civil service?
Is not it also true that all the fine language used by the Minister is a cover for a return to the "spoils system" which has ruined the American civil service and which goes back before the Northcote-Trevelyan reforms and will ultimately create great distrust among the public about the operations of the civil service because it is being put on the basis of accepting the Government's political philosophy which is wholly foreign now to the majority in this country?
§ Mr. Waldegrave
If the reforms did any of those things, I would join the right hon. Gentleman in opposing them. It would be wise for the right hon. Gentleman to heed his own advice, which is that what we are saying does require close attention. What will be devolved is structures, pay and management matters. Accountability for those matters lies ultimately through the Minister to the House. The right hon. Gentleman, with his long experience—I have read his diaries on many of these points—often found himself resenting detailed management intervention from the central Departments. If we can find ways of minimising that within proper accountability structures, we will have done something valuable.
§ Mr. William Cash (Stafford)
Does my right hon. Friend agree that one of the real reasons why we get into the mess that we do with respect to the amount of money spent on the civil service is the legislative burden that both sides of the House impose on it? Would not it be sensible, in the light of the review that is taking place, for us to consider reducing the duties imposed through Acts of Parliament which drive so many of the increases in duties imposed on our civil servants and in the functions imposed on the people of this country?
§ Mr. Waldegrave
My hon. Friend has made an extremely good point. That is why my right hon. Friend the Prime Minister, together with my right hon. Friend the President of the Board of Trade, has launched the major deregulation initiative. Over the years, under all Governments, we have found ourselves steadily increasing the amount of regulation that we ask the civil service to carry through—and it carries it through efficiently on all occasions. We then find that we have placed new burdens 996 on industry and on our population, which we regret. I accept the principle of what my hon. Friend said and we are introducing measures under the vigorous leadership of our right hon. Friend the President of the Board of Trade.
§ Mr. Peter Mandelson (Hartlepool)
Is the Minister aware that many people will regard the White Paper not as a clear, bold blueprint for the future, but as a rather patchy, inconclusive mish-mash? Will he confirm that his Cabinet colleagues, led bravely by the Foreign Secretary, threw out some of his more ludicrous, extreme proposals, and that what remains in the White Paper will not lead to the creeping politicisation and deprofessionalisation of the senior civil service which many fear? Does not he agree that, to overcome the serious concerns and worries that have been expressed by hon. Members this afternoon, he should consider introducing a new code of ethics that will govern and safeguard the neutrality, standards and professional independence of the civil service?
§ Mr. Waldegrave
I did not notice the hon. Gentleman under the table at the Cabinet discussions; perhaps he was there. I do not think that he knows how they went. The result is a policy and a White Paper which have been whole-heartedly endorsed, as I believe my right hon. Friend the Prime Minister will confirm, by every senior Minister in the Cabinet and elsewhere. The code of ethics point that the hon. Gentleman makes is a real one, but he should note that, last year, we brought together for the first time in the civil service management code all relevant documents, including the Armstrong memorandum and other important documents. It is vital that they are properly disseminated. They are part of the terms of service in the civil service. We await what the Select Committee says on the matter. The hon. Gentleman and I have no argument on the importance of maintaining that code. The Select Committee may wish to advise us on whether the code should be statutorily backed in some way. Now, as in the past, it is binding on civil servants and it must remain so.
§ Mr. Michael Shersby (Uxbridge)
To what extent does my right hon. Friend expect competition for the top jobs in the civil service to result in an inflow of permanent secretaries from outside? Will he give an assurance that such a move will maintain and enhance the standards of public service which the House is entitled to expect and which the Public Accounts Committee considers twice a week and on which it reports to the House every Session?
§ Mr. Waldegrave
Eight out of the present 35 permanent secretaries came from outside, including the head of the Treasury, so the process started some time ago. I do not know whether the number will increase. That depends ultimately on the skill, determination and resources that we put into the training of our people to enable them to compete properly. As for the service of the public and of the House, we must look at as wide a field as possible to employ the best possible people.
§ Dr. Tony Wright (Cannock and Burntwood)
Can the Minister say why it was sensible to make his statement on the White Paper before the Treasury and Civil Service Select Committee had completed its investigation into this matter? Why was it sensible to have overlooked the recent, devastating conclusions of the Public Accounts Committee, which said that standards in the conduct of public business were at their lowest point since before the Northcote-Trevelyan reforms and that the reason for that 997 decline was the increased inter-penetration of the public and private sectors and the erosion of the public service tradition? Why was it sensible further to erode that tradition rather than to deal with the issue? If it is sensible for the Civil Service Commission to consider new appointments to the senior civil service, would not it also be sensible to have a public appointments commission—
§ Madam Speaker
Order. The hon. Gentleman must resume his seat. I have asked for brief questions. I am attempting to assist hon. Members and call as many of them as possible, but I am not getting the co-operation from them to which I am entitled. I intend to have it from now on.
§ Mr. Waldegrave
On timing, we would have been happy if the Select Committee had finished its work first, but it did not seem possible to wait indefinitely. As we can consult it further, it seemed sensible, as we had finished our work, to publish the White Paper.
The hon. Gentleman provides a travesty of what the PAC report said. In the clearest terms, it stated that there was nothing in the reformed structures that inherently or in any way threatened public accountability or standards, but that in a more devolved system—and I accept that this is right—it is necessary to take even more trouble to ensure that everyone understands what his or her duties and responsibilities are.
§ Mr. Alan Howarth (Stratford-on-Avon)
Does my right hon. Friend accept that market accountability is not the same as democratic accountability and that both are required from the public service? Will he describe to the House the Government's view of the principle that should determine the balance between them?
§ Mr. Waldegrave
What drives the public service is accountability ultimately to the democratic process. There are certain parts of the public sector into which, if one does it properly, one can introduce choice and competition to the benefit of standards in general. However, in no sense is the public sector comparable to the market; otherwise, those things should be in the market. It is much better to privatise something which really should be in the market, and that is what we believe in. There is a distinction, or the Government would not be in this business in the first place. Nevertheless, there are things that can be learnt from private sector markets to the benefit of both sides.
§ Mr. Peter Hardy (Wentworth)
Does the right hon. Gentleman consider that the record and standing of this Administration are such that they will commend this policy to the public? Is he really happy with the contraction which has occurred and which now means that if our constituents write to certain Government Departments, the chances are that their letters will be mislaid?
§ Mr. Waldegrave
As a matter of fact, I believe that the performance of Departments in responding to letters has steadily improved in recent years, but where there are failings, they must be put right. That is a perfectly proper thing to do. The principle that I am setting out—giving Departments the chance to organise themselves properly to deal with the tasks that they face—will help with such problems where they exist rather than hinder.
§ Mr. David Howell (Guildford)
Does my right hon. Friend accept that he is managing with skill the latest stage in a process which began with the Fulton commission 998 under a Labour Government and continued with the White Paper on central Government reorganisation in 1970? This is the latest stage, so it has taken about a quarter of a century to get things moving which, I suppose, is quick by British standards. However, will he accept two caveats? First, our nation has a fine tradition of public service, which we must do nothing to damage. Secondly, in giving more accountability and separate management control to Departments, as we planned 25 years ago, will he ensure that there is still plenty of movement between Departments, especially between the Department of Trade and Industry and the foreign service?
§ Mr. Waldegrave
I strongly endorse what my right hon. Friend says about the standards and principles that lie behind our public service. He is right to say that the origin of a fair amount of the White Paper goes back a good many years—he said about 25 years, and that may be fair. In fact, that exactly parallels the time that it took to introduce the original Northcote-Trevelyan reforms, which were not fully implemented until the 1870s.
§ Mr. Harry Cohen (Leyton)
Why have the Government retained the fast stream for top management jobs? Does not it place a severe limitation on people getting to the top on merit?
§ Mr. Waldegrave
The study that was published today on the so-called fast stream, which the hon. Member for Norwich, South (Mr. Garrett) so dislikes—I should say that we issued a report partly in response to the hon. Member's badgering, so I must pay tribute to him for that—concluded that there is no large employer that does not have some means of trying to get hold of a share of the best output from universities and colleges. What is wrong is the name "fast stream", which gives the impression that the people involved in it have some privileged route to the top, whereas, in fact, they have not. It would hobble the civil service most unfairly in the jobs market if it were not allowed to go on what is called the "milk round" to try to get its share of the best people from our universities.
§ Mr. James Paice (Cambridgeshire, South-East)
May I welcome especially the delegation of responsibility for the management of budgets down through the senior civil service? Is not it the case that with delegation comes responsibility for more effective decision making? Have not the Opposition perhaps missed the fact that with responsibility ultimately comes a great deal of job satisfaction for people who have been deprived of any responsibility in the past?
§ Mr. Waldegrave
The point that my hon. Friend makes seems entirely right. It was accepted by the Labour party when the original next steps programme was introduced. Although the party's then spokesman, the late John Smith, criticised the Government on other matters, he accepted that devolution was a sensible way to proceed, and I believe that he was right to do so. When the hon. Member for Oldham, West (Mr. Meacher) has calmed down, I am sure that he, too, will find that it is the sensible thing to do.
§ Mrs. Ann Clwyd (Cynon Valley)
As most women working in the civil service are in the secretarial and clerical grades, what proposals has the Minister for increasing equality of opportunity for both men and women across the grades in the civil service?
§ Mr. Waldegrave
The hon. Member for Oldham, West (Mr. Meacher) said that there was nothing about equality of opportunity in the White Paper. In fact, there is a considerable passage. I believe that the civil service is a good equal opportunities employer and, in terms of the proportion of applicants, the numbers entering the service are about right. We are getting better at employing more senior women. That is necessary, but there is much more to do, and also more to do in reaching out to people in the ethnic minority communities. The White Paper addresses that subject, too.
§ Mr. Barry Field (Isle of Wight)
While my right hon. Friend is busy pushing his new broom through the corridors of Whitehall, will he consider the fact that one of the greatest impediments to the transfer of employees from the public to the private sector and vice versa is their pension entitlement? Will he share with the House his thoughts on what he intends to do about that?
§ Mr. Waldegrave
The imbalance in pension entitlements was at its most acute when there was very high inflation. I have not heard private sector employers arguing about it so much since then. In the schemes that we now have in place for swapping people to and fro, which are welcome both to private industry and to the civil service, we have not found such factors to be a bar.
§ Mr. Harry Barnes (Derbyshire, North-East)
Privatisation has led to the disappearance of a Department of State—the Department of Energy—and is leading to further uncoupling of the work of the Department of Trade and Industry, and to the disappearance of the accountability for measures to the House. The next steps agencies are taking over from Departments, and often run things in a rubbishy fashion. Does not the Minister realise that in the end a small civil service might be a manipulative civil service—in fact, no civil service at all?
§ Mr. Waldegrave
There is a good deal of rubbish in what the hon. Gentleman says. I remember a Conservative Government setting up the Department of Energy. That was nothing to do with privatisation, and the fact that energy policy is now run from within the DTI is nothing to do with privatisation either. When the hon. Gentleman attacks the "rubbishy" next steps agencies, he should remember that he is attacking two thirds of the civil service. I do not believe that that is right. The hon. Gentleman will find in the White Paper evidence of the fact that, according to a whole range of indicators, the performance of the next steps agencies is improving services to the people who rely on them. If the hon. Gentleman doubts that, he should study the evidence that we have placed in the Library. If he does so, he will tind that he is wrong.
§ Mr. Michael Brown (Brigg and Cleethorpes)
In connection with the question asked by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) concerning fixed-term contracts, will my right hon. Friend tell the House whether the White Paper says anything about the principle of secondment? Does not that principle provide the opportunity, on a two-way basis, for people from the civil service to play a role in industry and vice versa? Does the White Paper say anything about that?
§ Mr. Waldegrave
It does; it endorses the importance of more secondments and of those who work with the civil 1000 service to arrange them. I have in my Department several secondees from outside; they make a valuable contribution and I believe that it helps to develop their careers in the private sector, too. Equally, those from the civil service who go out find that their careers are enhanced. I do not believe, as some Opposition Members seem to, that any threat arises from the mixing of the public and private sector cultures. Both gain from it.
§ Mr. Mike O'Brien (Warwickshire, North)
The Minister has been anxious to assure us of the political impartiality of new entrants into his new model senior civil service. Will he confirm here and now that active participation in one's local Conservative association will be a disqualification rather than the qualification for a new entrant?
§ Mr. Waldegrave
The rules on that are perfectly clear. Those who work for political parties on either side—presumably there are people on the Labour side who are also inconvenienced—are subject to the published code, which the hon. Gentleman can find in the Library. There is no more difficulty on that subject now than in the past.
§ Mr. Anthony Steen (South Hams)
It was a jolly good statement, and the whole House is most grateful to the Chancellor of the Duchy of Lancaster. We much enjoyed the statement, but one inherent danger was not mentioned—the likelihood that the civil servants who are left when others have been removed will become more over-zealous and officious. Will the rules and regulations be more over-zealously enforced by the remaining numbers? Surely the raison d'être—if my right hon. Friend will excuse the phrase—of the civil service is that civil servants must serve the public, that they must help to create jobs and that they must help to create wealth in the private sector. Is not that the test of the civil service today?
§ Mr. Waldegrave
The overwhelming raison d'être—the use of the phrase "raison d'être" by my hon. Friend is slightly surprising, now that I come to think of it—or duty of the civil service is to serve the system of ministerial accountability properly and to carry out the duties laid on it ultimately by the House. It is ultimately the House which should take the responsibility for over-regulation and which should take steps to diminish it. It should not blame over-regulation on the civil service. That is why it is a political matter, for us as the Conservative party, to lead the campaign against over-regulation which my right hon. Friend the Prime Minister launched at our party conference.
§ Dr. Liam Fox (Woodspring)
Can my right hon. Friend put the streamlining of the civil service into context by telling us what has happened to total civil service numbers since the Government came to power so that the House and the country can differentiate between the Government's love for less government and the bloated bureaucracy left and loved by the Labour party?
§ Mr. Waldegrave
The highest number the civil service achieved—if that is quite the right word—was under the previous Labour Government. We have brought the number down from 732,000 in 1979 by almost exactly 200,000. That is an achievement of which we should be proud. We should also be proud of the fact that the smaller civil service is carrying great burdens and doing great work with greater efficiency than was the case then.
§ Mr. Simon Burns (Chelmsford)
Does my right hon. Friend accept that one of the major achievements of our civil service over the past century has been its ability to evolve and to develop in response to changing circumstances and needs? Does he accept that the White Paper published today advances that fine tradition? It looks yet again at cutting out inefficiency and wasteful bureaucracy and it seeks to improve even more standards of efficiency and user-friendly services, both for those who receive them at the sharp end and for the civil servants themselves.
§ Mr. Waldegrave
I believe that my hon. Friend is right and I also believe that if one gives a clear task and a clear challenge to the civil service, it always shows itself willing to meet it. The gains in efficiency that we are seeing and the gains in service to the customer—the patient, the pupil and everyone who relies on the civil service—are genuine. The civil service should be congratulated on them. Civil servants understand as well as we do that the search for efficiency gains never ends.
§ Mr. Michael Bates (Langbaurgh)
Does my right hon. Friend accept that the many thousands of my constituents who are employed in the private sector, who have often learnt at great personal cost of the need in the modern world for ever-increasing efficiency and productivity and who have realised that there is no such thing as a right to a job for life, will be pleased to learn that the rules that apply to them are about to apply to the people whose salaries they pay?
§ Mr. Waldegrave
What my hon. Friend says is right. We have a duty in the House to the taxpayer as well as to the public service. I believe that the balancing of those two has been achieved in the White Paper. We need to continue the drive for efficiency, but we also need to protect the apolitical, independent nature of our civil service. I believe that the White Paper achieves that.
§ Mr. John Garrett (Norwich, South)
Surely the fact is that the right hon. Gentleman, nominally the Minister for the civil service, has simply copped out. Rather than produce a policy for the future of the civil service, he has 1002 signalled the start of a competition between Ministers to fire as many civil servants as possible. The results will be purely arbitrary, with the fast streamers and mandarins, like him, getting off exceptionally lightly and junior jobs going in their thousands. The right hon. Gentleman paid tribute to the Treasury and Civil Service Select Committee, so why did he stop it carrying out a direct investigation of the civil service? Will he ask his successor to reconsider these thoroughly incompetent proposals?
§ Mr. Waldegrave
The hon. Gentleman achieves a new low. He always manages to go below the level of the subject, but today he has managed to get right under the carpet. As usual, the hon. Gentleman is factually wrong. In recent years, the proportion of those leaving has been higher from the senior civil service than from the civil service more widely. If the hon. Gentleman had listened to the wireless this morning, he would have heard the First Division Association pointing that out.
I have answered questions in the House before about the survey of the civil service. The issue is perfectly simple. As the hon. Gentleman and his hon. Friend the Member for Oldham, West (Mr. Meacher) demonstrate all the time, those matters, at least for the Opposition Front-Bench spokesmen, although not for all the Back Benchers, are of political dispute. If we involved the opinions of civil servants in that political knockabout and we identified those opinions, we would have done more at a stroke to damage the political impartiality of the civil service than if we had done anything else.