HC Deb 12 June 1995 vol 261 cc495-6
28. Mr. Duncan

To ask the Chancellor of the Duchy of Lancaster what progress the Government are making with their market-testing programme. [26060]

Mr. Horam

As our announcement in January on the "Competing for Quality" programme showed, progress has been very good. By September 1994, £2 billion of activities had been looked at and annual savings of more than £400 million identified. New figures will be available shortly.

Mr. Duncan

I am grateful to my hon. Friend for that answer. Does it not contrast starkly with Labour party policy, which seems to be against such efficiency savings? Indeed, as a result, the Labour party seems to be in favour of inefficiency and therefore higher taxation. What savings does my hon. Friend estimate we are likely to make in the forthcoming year?

Mr. Horam

Until September, we are tackling a programme worth about £860 million. At the current rate of saving of about 20 per cent., that should yield—if my arithmetic is right—savings of about £170 million for the taxpayer.

Ms Walley

Will the Minister look at the way in which the issue is being raised in the health service? Will he look closely at the decision of an industrial tribunal in Birmingham today? The transfer of a particular contract from one part of the health service to another has been found to be unlawful in the European Court because of the rules on the transfer of undertakings. When will the Government recognise that the exercise does not take into account the long term but looks only at certain so-called efficiency savings without considering the total cost and the dismantling of organisations such as the national health service.

Mr. Horam

The programme does take account of the long term. Clearly, it is beginning to be a long-term factor. It started in the late 1980s and has carried on successfully over the years. If the hon. Lady would care to give me details of the specific example that she mentioned, I will certainly look into it.

Dame Elaine Kellett-Bowman

Is there any reason why in-house bids should not be acceptable, particularly, for example, in the running of pension funds?

Mr. Horam

It is normal practice to accept in-house bids. Only in very rare circumstances, where expertise is not available in-house, are in-house bids not accepted. I assure my hon. Friend of that.