HC Deb 02 November 1995 vol 265 cc451-89

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

7.15 pm
The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman)

Before I open the debate, I should like to welcome to the Opposition Front Bench the right hon. Member for Bishop Auckland (Mr. Foster). For a long time, he sat—

Mr. Giles Radice (Durham, North)


Mr. Freeman

Literally silent, but it was a thoughtful silence. We welcome him to the Opposition Front Bench. Although I am sure that the right hon. Gentleman and I will differ on policy, one thing is certain: the debate may be frank, but it will be courteous.

An all-day debate took place in the House on 18 May this year on the first report of the Nolan committee on standards in public life, so far as they affect the Government. Exactly two months later, on 18 July, the Government published their response to that report in the form of a White Paper and statements on the response were made here and in the other place.

I announced then that it was the Government's intention to have a further debate in this spill-over period. The debate would cover the proposed rules for business appointments for former Ministers before they were introduced from the start of the new Session, and the White Paper as a whole. I am pleased to be able to honour that commitment today.

I should like to make clear at the outset the very great degree of common approach between the Nolan committee and the Government. The Government's White Paper accepted all the major recommendations in the committee's report addressed to Government. Work on implementing a large number of those recommendations is now under way. Indeed, in some cases, it had already started before the White Paper was published.

I emphasise the fact that the Government accept the seven principles of public life set out in the Nolan report. They are important and they are worth repeating. The principles, which the committee set out as an over-arching framework to its recommendations, were selflessness, integrity, objectivity, accountability, openness, honesty and leadership. I am sure that the whole House will recommend and accept those seven principles. They are worth repeating constantly.

We are confident that those in public life in this country already adhere to those principles to a very high degree, as the committee acknowledged in its report. But we believe that the acceptance and implementation of the committee's recommendations will help to provide public reassurance on that point in areas where there may have been confusion or doubt.

I deal now with several specific and important issues to which I drew to the attention of the House in my statement on 18 July. I refer first to outside appointments taken up by former Ministers of the Crown. The Government believe that it is in the public interest that former Ministers with experience in government should be able to move into the private sector, not only to earn their living but to contribute to the United Kingdom economy—a view that is shared by Lord Nolan and his committee. But it is equally important that, when a former Minister takes up a particular appointment, there should be no cause for any suspicion of impropriety.

A balance needs to be struck, and I believe that the guidelines on the acceptance of appointments outside Government by former Ministers of the Crown, which I placed in the Library on Monday, achieves that. The key point is that we want those with experience of business, professions and other walks of life to come into Parliament and into Government, and then have the opportunity to return.

The aims of the guidelines are to counter suspicion, however unjustified, first, that the statements and decisions of a serving Minister might be influenced by the hope or expectation of future employment with a particular firm or organisation, and, secondly, an employer could make improper use of official information to which a former Minister has had previous access.

The guidelines provide a means for former Ministers to ask the advisory committee on business appointments for its advice about any appointments that they wish to take up within two years of leaving office.

That is not a statutory system—in fact, Lord Nolan and the committee came down in favour of an advisory system and not a statutory one—but the expectation is that all Ministers will ask the committee for advice. I should make it plain that I have authority only to speak on behalf of the Prime Minister and the current Administration, but we expect that all Ministers, if they are placed in a position of wishing to take up outside appointments, will seek the advice of the committee. Indeed, that is the reason why the guidelines are cast in terms of the availability of the committee to provide advice. It is not a statutory, but an advisory system.

Mr. Robert Maclennan (Caithness and Sutherland)

Will the Minister give way?

Mr. Freeman

I will certainly give way, but I should like first to finish the point because it is important.

If a Minister chooses not to seek the advice of the committee, that will inevitably become public. The published reports of the advisory committee will ensure appropriate scrutiny. That is the sanction.

Mr. Maclennan

The Minister has placed great emphasis on advice, yet one of the Nolan committee's recommendations that touches on taking up appointments, and for which the committee made it plain that advice was not necessary, was that no Cabinet Minister should take up an appointment in business for three months, and that that should be automatic and not a discretionary matter. Why have the Government rejected that?

Mr. Freeman

With great respect, the Government have not rejected that; they have accepted it, with one proviso—I am coming on to it—that there may well be circumstances in which the advisory committee might feel that even the three-month waiting period could be waived. The circumstances are very limited and special, such as a return to an occupation where there was absolutely no conceivable conflict of interest or, indeed, any possibility that there could be justifiable suspicion.

I draw the attention of the hon. Member for Caithness and Sutherland (Mr. Maclennan) to the fact that permanent secretaries—I suppose that there is some analogy—typically wait three months. The reason for the three-month waiting period for Cabinet Ministers and for permanent secretaries as a general rule is that they are privy to information about policy across all Departments: Government policy as a whole. Junior departmental Ministers are normally privy only to the policies of their particular Department. That is the reason for the three-month waiting period.

From my own experience, and in the experience of many right hon. and hon. Members in the Chamber tonight, I know that, when one moves from one Department to another, one's knowledge tends to stale remarkably quickly, because of the pace of modern life and modern government. I therefore believe that there is justification for the three-month rule, since general knowledge of policy will quickly stale.

A two-year maximum waiting period applied to specific jobs for which departmental Ministers, including Secretaries of State, may have specific knowledge, as I say, may be caught in some limited circumstances—I hope limited circumstances—by a need to wait. That is because of their more specialist knowledge, experience and connections with prospective employers.

Mr. Maclennan

I do not want to delay the Minister on this point but I think that he is chopping logic. Either a provision is automatic or it is discretionary. Nolan recommended that it should be automatic that Ministers do not take up appointments in business for three months. The Government are providing the discretion to waive it. That is not an acceptance of the Nolan recommendation: it is a clear rejection of it. Indeed, it is less than candid to present it as the Minister has.

Mr. Freeman

If, with the leave of the House, I am able to make the winding-up speech, I shall certainly reflect further on what the hon. Gentleman has said. I will refresh my memory as to precisely what the Nolan committee said in relation to the three-month rule for Cabinet Ministers. If the hon. Gentleman speaks, it might provide him with an opportunity to develop the point further.

The advisory committee will consider each request on its merits. It will ask the former Minister for details of the appointment, and also for details of any direct or indirect contact that he or she has had with the prospective employer or any of its competitors. There will be a standard form for such information, although Ministers will of course be able to supplement it with a letter.

The advisory committee will then consider each appointment against tests to ensure that the appointment cannot be seen as being in some way a reward for past favours, that it will not give the prospective employer an unfair advantage through access to trade secrets of competitors or knowledge of unannounced Government policy, and that it will not give rise to justifiable public concern for any other specific reason.

But in doing that, the committee will wish to be satisfied that any concerns are justified and not mere speculation. The committee will need to balance any points under those tests against the desirability of former Ministers being able to move into business or other areas of employment, or the need for them to be able to start a new career or resume a former one.

The advisory committee will be able to advise the former Minister that it sees no objection to the appointment, or it may recommend a delay of up to two years before it is taken up; or for a similar period, it may recommend that a former Minister should stand aside from certain activities of his employment or profession. One thinks, for example, of a solicitor.

All former Ministers of Cabinet rank will be expected to wait three months after leaving office before they take up any appointment, unless the committee confirms that the proposed appointment is such that no considerations of improper advantage could apply. As I said earlier, if the committee considers that a longer waiting period is necessary, it will advise the former Minister accordingly. The committee will consider requests for advice in confidence and, of course, independently of the Government. Its advice will be made available for publication, but only when an appointment is taken up.

I would expect it to become the practice that the employing organisation would refer to the advisory committee's advice when it announces that a former Minister is joining that organisation. The committee will produce an annual report summarising the cases with which it has dealt in the previous year. It is intended that the guidelines will come into effect from the start of the next Session of Parliament on November 15.

The Nolan committee also made recommendations on the business appointments rules as they affect civil servants and special advisers. I intend to publish, for consultation, after the start of the next Session, changes to those rules, which will include bringing special advisers within them for the first time. We intend that the new rules, including those which affect special advisers, will come into effect on 1 April 1996, but I would expect any special advisers appointed between today and the end of March 1996 to agree to abide by the existing rules on a voluntary basis.

Next I should like to mention the civil service code, the final text of which I announced on Monday. We have proceeded with particular care in this area. Our objective has been to maintain and build on the consensus which greeted the original draft code produced by the Treasury and Civil Service Select Committee. I repeat the congratulations that the Government gave the Committee on its draft at the time. I see the Chairman of the Treasury and Civil Service Sub-Committee, the hon. Member for Durham, North (Mr. Radice), in his place and I repeat, specifically for his benefit and for those on his Committee, our thanks.

Hon. Members will recall that we accepted the substance of all the recommendations of the Nolan committee on the code. Those were that the code should cover wrongdoing of which a civil servant is aware although not personally involved with; wider reporting of appeals by the civil service commissioners; a confidential appeal channel independent of a civil servant's line management; and introduction as soon as possible.

We published a revised draft in July to allow the civil service unions and others the opportunity to comment on the text, as it then incorporated the results of the initial consultation, including the Nolan committee recommendations. In fact, the further consultation has resulted in only a few very minor drafting alterations. I believe that we now have a succinct statement of the constitutional relationships and values that civil servants must uphold, which in all substantive respects commands near universal approval. That consensus is a precious asset, on which we should now build.

We agreed with the Nolan committee's recommendation that the code should be implemented as soon as possible, without waiting for legislation. Subject to the necessary Order in Council, we shall introduce the code in December to take effect from 1 January 1996.

I turn now to a point put to me by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) in questions on my statement on 18 July. He asked whether the text that the Government had proposed for a revised first paragraph of "Questions of Procedure for Ministers"—which, as hon. Members will know, is published by the Prime Minister—could be amended to indicate that Ministers would withhold information from Parliament only in exceptional circumstances.

I have looked at "Erskine May" to see how far it has been a policy of successive Administrations to withhold information on certain matters. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) did the House a service in 1977–78 by putting a series of questions to the then Labour Administration, of which the right hon. Gentleman was a senior member, about departmental practice in withholding answers to questions. Such practice was extensive, and the results are summarised on page 292 of "Erskine May".

Since then, there have been many advances towards greater openness and I am sure that all hon. Members welcome that fact. Of course, the House would not have discussed the text of "Questions of Procedure for Ministers" at all in 1978, as it was not published by any Prime Minister before 1992. The Security Service had not then been avowed. It has now been placed on a statutory footing and there is an oversight committee of parliamentarians. This is the first Government to set out a clear standard of open government and to refer disputes on the provision of information to the ombudsman to be tested against clearly expressed exemptions. All those developments have been initiatives of my right hon. Friend the Prime Minister.

No Government in the world operates on a basis of total transparency. It would not serve the interests of good government to operate a policy of total openness about, for example, the operations of the security and intelligence services, matters of great defence or diplomatic sensitivity, or Cabinet proceedings. I believe that the House accepts that.

It would be true to say that the occasions when information will be withheld are "exceptional": the intention is to be as open as possible. But we must invoke the precision of the Government's code of practice on access to official information in "Questions of Procedure for Ministers" without implying that the code would be definitive in a court of law, or indeed in Parliament, where the balance of public interest will need to be considered case by case.

Mr. Richard Shepherd (Aldridge-Brownhills)

The White Paper on open government contains a reference to the fact that we may appeal to the ombudsman, but the new proposal does not. It appears to me that paragraph 27 is being loosened and that the interests of the House, as opposed to those of the Executive, were better served by the old rubric. The new form of words refers to withholding information only when disclosure would not be in the public interest". That is the heart of political debate in this place. The Scott inquiry examined those issues carefully and it will release its report soon.

Therefore, I believe that it is a little previous to suggest that this is the finished word on "Questions of Procedure for Ministers". I do not think that I have expressed vigorously enough my deep opposition to the idea that this is a weakening of that higher standard which requires Ministers to account truthfully to the House and to the public.

Mr. Freeman

My hon. Friend will be pleased to know that I intend to propose an amendment to the text. The right hon. Member for Bethnal Green and Stepney asked me to reflect upon the published text and I shall now read my proposed change—which has been approved by the Prime Minister—into the record. I obviously welcome the comments and views of hon. Members.

The new formulation of "Questions of Procedure for Ministers" shall be as follows: Ministers must not knowingly mislead Parliament and the public and should correct any inadvertent errors at the earliest opportunity. They must be as open as possible with Parliament and the public, withholding information only when disclosure would not be in the public interest, which should be decided in accordance with established Parliamentary convention, the law, and any relevant Government Code of Practice". I have provided three references: first, established parliamentary convention—I have given the reference in "Erskine May"—secondly, the law; and, thirdly, any relevant Government code of practice. My hon. Friend has also drawn attention to the document on open government that we have published already. I hope that the amendment provides greater clarity. Right hon. and hon. Members will no doubt wish to study the record and perhaps reflect further upon the debate.

My hon. Friend referred to the ombudsman. I believe that Ministers should be accountable to the House for their actions. I believe that the ombudsman has a role in examining the actions of Ministers and Departments with regard to openness and access to information by members of the public. However, if it is thought that a Minister has misled the House, he must come to the Dispatch Box and give an account of himself. The House, and not the ombudsman, must examine the evidence and bring him to account.

Mr. Peter Shore (Bethnal Green and Stepney)

I am grateful to the right hon. Gentleman for living up to his promise and reflecting further on the wording of the proposed revised draft of "Questions of Procedure for Ministers". The crux of the matter is how the public interest is defined. I thought that the form of words proposed originally was very weak. It said that Ministers must not knowingly mislead Parliament and withhold information only when disclosure would not be in the public interest". I think that the criteria that the Minister has submitted for judging the public interest are helpful; I shall certainly study them with great care. However, I remind the Minister of the remarks of the hon. Member for Aldridge-Brownhills a few moments ago. We are living in the shadow of the Scott report and I believe that, when it is published, it will throw a great deal of light on how public interest has been interpreted in the past and what is and what is not proper for Ministers to disclose to the House and to the public.

Mr. Freeman

It is fair to say that, when the Scott report is published, studied and doubtless debated, we shall all have to reflect on what it says and on the sentiments and the wishes of the House in that regard. I cannot possibly anticipate what will be said.

The right hon. Gentleman asked me to reflect further on that point, and I have done so. The amendment to "Questions of Procedure for Ministers" becomes effective immediately. Any further changes that may or may not be deemed appropriate will also become effective at the proper time. It is not a matter of the Prime Minister issuing instructions at the beginning of a Parliament and then forgetting about it; we have made an amendment that seeks to address the points raised and considered by Nolan.

Dr. Tony Wright (Cannock and Burntwood)

I ask the Minister to reflect on what he said about Ministers' differing accountability to the House and to the ombudsman. In a number of instances, the ombudsman has been able to extract information from Ministers that Members of Parliament were not able to extract. That occurred most recently with the very important report about fraud in the Treasury. Is it not crucial that the same rules about openness should apply across the public arena, whether it is in relation to Members of Parliament or members of the public? Should not the guidelines reflect that fact?

Mr. Freeman

The rules apply specifically to Ministers of the Crown. In terms of being called to account by Parliament, it would not be helpful if the ombudsman intervened and examined the alleged statement or misstatement. In my judgment, it better reinforces the accountability of Ministers if the Minister involved, either by personal statement or by debate, accounts to Parliament directly.

As for the role of the ombudsman in relation to open Government, the record so far has been successful. It was a sensible and constructive move and I see no degree of confusion or irreconcilability between the role of the ombudsman in relation to Government Departments and accountability of Ministers for the veracity of what they say to Parliament. I hope that what I have just said will have shown the House the clear and satisfactory progress that we are making on developing the White Paper proposals in those key areas.

One further part of the White Paper that I wish to mention briefly—as it takes up half the committee's recommendations addressed to Government—deals with quangos. The Nolan committee divided its recommendations into those that affected appointments to certain quangos—in this case executive non-departmental public bodies and NHS bodies—and those that dealt with the general propriety of board members and, in one or two cases, the staff of those bodies.

On appointments, the Government were able to accept virtually all the committee's recommendations, many of which in practice built on the public appointment unit's review of guidance on public appointments. That was issued at the beginning of the year, formed the mainstay of the Government's evidence on public appointments and had already been agreed by Ministers by the time the committee published its report. The committee's main additional recommendations to that framework were that panels or committees with an independent element should be set up to advise on all appointments to executive NDPBs and NHS bodies; and that a new, independent commissioner for public appointments should be appointed. The essential principle of all such appointments is that they should be based on merit or qualification for the job.

In their response, the Government set out in some detail the way that they envisaged the advisory panels working in practice. They proposed that such arrangements should be comprehensively in place by July 1996. The Government also accepted the proposal for the commissioner and in my statement of 18 July I announced that the post would be publicly advertised immediately. That duly happened, and the arrangements for appointing the commissioner are now well advanced. We should be in a position to announce the new commissioner later this month.

On the general governance of quangos, the committee made a number of recommendations concerning the implementation of best practice procedures through, for example, codes of conduct and openness, building in each case on existing Government initiatives. The Government accepted those recommendations, and they are being implemented.

Among the most important recommendations were those proposing a review of the legal framework governing propriety, accountability and the arrangements for external audit in public bodies. We expect to complete that review by the end of the calendar year. I know that many with interests in the area, including the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), contributed material to the review. We shall pay careful attention to what they have said, and publish proposals in a consultation paper.

In his speech to the House on 18 May, my right hon. Friend and predecessor the Member for Wirral, West (Mr. Hunt) paid tribute to the selflessness—a Nolan principle, as I have noted—of the large numbers of people who serve on public bodies for little or no remuneration. I should like to echo his remarks, and I am sure the whole House joins me in that commendation.

We do not view non-departmental public bodies from the viewpoint of appointments or propriety alone. They exist to do a useful job; they are not set up when there is no need for them or kept needlessly in existence when their function is finished. Since 1979, we have abolished hundreds of NDPBs. I am pleased to announce that when annual figures are next published in December this year, they will show a further reduction of more than 100, which will mean a net fall of more than 40 per cent. since 1979, so I hope that the House will see that it is possible to combine economy and efficiency with the highest standards of propriety and that the Government are doing both.

The Government have never been reluctant to take any steps necessary to improve the quality of the country's public life and public services. I hope that I have clearly outlined to the House how we are now doing that through our White Paper response to the Nolan committee and the current work to implement that response. I know that they are issues of considerable importance to the House and I look forward to hearing the views of right hon. and hon. Members accordingly. With the leave of the House, I shall seek to reply to points raised in the debate when we conclude it.

7.44 pm
Mr. Derek Foster (Bishop Auckland)

I thank the Chancellor of the Duchy of Lancaster for his kind remarks. Of the 16 years that I have been in the House, 13 have been relatively silent. I spent 10 years as the Opposition Chief Whip, one further year as a Whip and two years as the parliamentary private secretary to our former leader, Neil Kinnock. It could well be that already people are saying to themselves, "I liked him better when he was silent." I hope that is not the case. We shall see.

I look forward very much to debating with the right hon. Gentleman these and others matters over the coming months, and I am sure that, as he says, even though we may differ—not violently but certainly substantially—at least the debate will always be courteous.

I thank the Minister for fulfilling his promise in his statement to the House on 18 July 1995 at column 1473 first to publish a text for consultation on guidelines to Ministers accepting business appointments before introducing the rules at the beginning of the next Session; secondly, to have a debate on the White Paper as a whole in the spillover session; and thirdly, to consult on an extension of business appointment rules to Ministers' special advisers.

The Minister was courteous enough to answer two written questions of mine on Monday 30 October and to place other material in the House of Commons Library. However, I have to say—I hope he does not think that I am being churlish—that the press had the information at 2.30 pm, but it did not come my way until 5 pm. I know that Madam Speaker, and I am sure Madam Deputy Speaker, will have some views on that, as Madam Speaker has expressed her views from time to time.

The Minister's predecessor, the right hon. Member for Wirral, West (Mr. Hunt), in opening the civil service debate on 23 March 1995, quoted the November 1994 report of the Select Committee on the Treasury and Civil, which said: The British Civil Service is a great national asset. Since the 1870s, it has been the permanent and impartial instrument of all administrations. Governments have always seen it as their duty to preserve its efficiency and honesty for their successors."—[Official Report, 23 March 1995; Vol. 257, c. 549.] Let me, on behalf of my party, wholeheartedly endorse that view.

Before I was elected to the House, I spent 10 years in the private sector, nine years in the public sector and a number of years in the voluntary sector. I may be unique in that experience. Each sector has enormous strengths. Each has much to learn from the others. None has the monopoly of wisdom. In particular, the idea that the business culture is or should be paramount has in my view been profoundly damaging to our society and democracy. Hopefully, that short-sighted, arrogant philosophy has almost run into the sand. If not, it will do so shortly after the present Government are swept out of office whenever they have the courage to call a general election.

Let us make no mistake. We would not be having tonight's debate without the deliberations of the Nolan committee. The Prime Minister set up the Nolan committee only because his Government were sinking beneath a sea of allegations of sleaze. That was the act of a man desperate to sweep those allegations from the tabloid front pages into the long grass of the lengthy consideration by the Nolan committee.

On 20 May, the Prime Minister announced to the Sunday newspapers: I not only accept the broad thrust of Nolan's recommendations, I agree with Nolan. Many of us heard the Prime Minister say in the House today that he accepted the broad thrust of Nolan's recommendations. If he agrees with them, let the Prime Minister support Nolan and vote for the implementation of his recommendations in full on Monday night.

Business appointments are a bone of contention. The Chancellor of the Duchy's predecessor claimed in his evidence to the Nolan committee that no change to the existing arrangements was required. Other parliamentarians, such as the right hon. Member for Sutton Coldfield (Sir N. Fowler) and Lord Younger, were critical of the current position, and Nolan accepted their concerns. Nolan recommended, on page 54 of his first report that a system similar to the civil service business appointment rules should apply to Ministers. Nolan helpfully set out the salient features of the civil service scheme on page 52:

  1. "i) all civil servants at grades 1 and 1A … and 2 … must submit their future job plans to the Advisory Committee on Business Appointments for approval …
  2. ii) they must seek approval both for their first job and for any others within two years of leaving the civil service."
Bearing in mind that far more public concern had been expressed about former Ministers taking up appointments than about civil servants doing so, the innocent layman would expect the rules laid down for Ministers to be at least as stringent as those laid down for civil servants. On the face of it, that is not so. When the Chancellor of the Duchy issued guidelines on Monday, the words must submit their future job plans and must seek approval for both their first job had become "may seek advice" for Ministers. An obligation placed on civil servants had become an option for Ministers.

The Chancellor of the Duchy said in his statement to the House on 18 July: We accept the Nolan committee's recommendation that Ministers should be brought within the scope of the Advisory Committee on Business Appointments."—[Official Report, 18 July 1995; Vol. 263, c. 1473.] He claimed to be implementing Nolan in full. When the right hon. Gentleman briefed the press on Monday, he repeated that claim. When he spoke on television the other day, he made the same claim, yet it is clear that the scheme for Ministers is far weaker than that for civil servants—against the Nolan recommendation.

The Chancellor of the Duchy will argue that is irrelevant, because, if a Minister did not seek advice—or having sought advice, did not heed it—that will seep into the public domain and lead to censure in the press. To me, that "may" is dishonest. Loosely translated, it means that Ministers had better seek advice or else. If that is the case, why did not the right hon. Gentleman say so? Would it not have been better to say, "Ministers will be expected to seek advice," or even, "Ministers should seek advice"? After all, in "Questions of Procedure for Ministers", the phrase "Ministers should" appears in almost every paragraph.

If the Chancellor of the Duchy is looking for an effective sanction to buttress "Ministers should seek advice" rather than "Ministers may seek advice", would it not be far more satisfactory to place a duty or even an expectation on the business advisory committee to make it public that a former Minister had not sought advice—or having sought it, had not heeded it? That would be far better than the somewhat dubious practice of someone—not the Minister, of course—whispering behind a hand to some journalist, so that information seeps into the public domain.

I still believe that the guidelines are unsatisfactory and I urge the Chancellor of the Duchy to withdraw them, even at this late stage, and to replace them with new guidelines that will fulfil his promise to implement Nolan in full—especially as the right hon. Gentleman reiterated that he is seeking to aid the Prime Minister in his determination to uphold the highest standards in public life". After the Chancellor of the Duchy made his statement to the House on 18 July, two of his former colleagues took up lucrative business appointments. The former Foreign Secretary went to NatWest for a sum rumoured to be £200,000, for a three-day week, and the right hon. Member for Wiltshire, North (Mr. Needham), a former Minister for Export Trade, joined his long-standing friend and patron, Lord Prior, at GEC for more than £100,000.

It is disturbing that both claim to have voluntarily submitted themselves to the advisory committee under the chairmanship of Lord Carlisle. It is difficult to disagree with the conclusion of The Guardian leader on 4 September: If the Whitehall machine gave Mr. Needham a clean bill of health then it is the system itself which is sick. If the Chancellor of the Duchy does not like The Guardian, perhaps The Independent has more credence. The headline to its leader the same day shouted "Nolan is not enough". The leader writer claimed: Lord Carlisle has got it wrong. He should have insisted on a decent interval between Mr. Needham's period as a trade minister and his appearance on the GEC board … The Needham case is a timely reminder that, Nolan notwithstanding, the battle is not over yet". As to the civil service code, I congratulate the Government on seeing sense. The code is a major step in the right direction and although I share the fears of the Council of Civil Service Unions that the code does not go far enough, we nevertheless welcome it. Why should there be a new civil service code? Permanent revolution within the service has not only affected morale, leaving a pall of insecurity over its work, but has fragmented the service—which has diluted its sense of unity of purpose underpinned by common values.

More fundamentally, as the clash of cultures has deepened and become all-pervading, an increasing number of civil servants have complained of unwarranted pressure from a variety of sources. The code ought to help in that direction. It was seen as having several advantages. It was envisaged that the code would have some clear public status, public endorsement going beyond the government of the day. The code would have far wider currency than existing documents, being available to all civil servants and to the public. The process of drawing up the code would itself encourage far wider public and parliamentary debate. The code would provide far greater clarity about the role, duties and responsibilities of civil servants. Finally, the code would be a unifying force in the increasingly heterogeneous civil service.

I see two great advantages in the code. First, there is the onus placed on Ministers to read the code, to take notice of it and not to ask civil servants to act outside its provisions. The other advantage is the institution of an independent appeals procedure, which is wholly welcome. My predecessor, the hon. Member for Dewsbury (Mrs. Taylor), said of the code on 18 July: we still believe that legislation is necessary. If the Government were to press ahead with it, they would have our full co-operation."—[Official Report, 18 July 1995; Vol. 263, c. 1475.] That remains our position.

It is revealing that the Government's first position was that the new code was not necessary. Fortunately, after the powerful inquiry conducted by the Sub-Committee of the Treasury and Civil Service Select Committee under the distinguished chairmanship of my hon. Friend the Member for Durham, North (Mr. Radice), the Government saw sense, and some consensus has emerged from the subsequent consultations.

I hear rather dark rumours to the effect that the Sub-Committee chaired by my hon. Friend is to be abolished. The House would regret that. The quality of its work has been extremely high, and it has gained enormous respect throughout the civil service and in Parliament. The House will wish to join me in thanking my hon. Friend and his colleagues on the Sub-Committee for its outstanding work.

I have a few reservations about the code. It is arguable that it does not fully address the relationship between civil servants and Parliament, especially parliamentary Select Committees. Secondly, the code does not adequately deal with a civil servant's relationship with the public. It is possible, for example, that Scott will argue that civil servants have a duty to the public, interest over and above the duty that they have to Ministers.

Finally, the Chancellor of the Duchy will agree that the acid test of the code's effectiveness will be how it is implemented and received in the civil service. He will know that the Council of Civil Service Unions argues with some force that central Departments in the civil service should issue detailed advice and guidance to departments on a wide range of issues.

The Chancellor of the Duchy has been courteous enough to make an announcement to the House on "Questions of Procedure for Ministers", and we thank him for that. We shall study it with some care. Again, the House has Nolan to thank for developments on "Questions of Procedure for Ministers". Nolan recommended that the Prime Minister puts in hand the production of a document drawing out from 'Questions of Procedure for Ministers' the ethical principles and rules which it contains to form a free-standing code of conduct or a separate section within the new QPM. The Government responded by accepting Nolan's proposals, with some reservations, and producing a draft of the new ethical part of the QPM.

There was some public criticism that the new draft would encourage ministerial secrecy. Nolan proposed a draft which included the words: Ministers must not mislead Parliament. They must be as open as possible with Parliament and the public. The Government draft said: Ministers must not knowingly mislead Parliament and the public … withholding information only when disclosure would not be in the public interest". Fears were expressed that Ministers could withhold information at will because they define the public interest.

The Observer of 16 July revealed that the Cabinet had, the previous week, accepted the proposal of the Chancellor of the Duchy to delete the public interest defence. The Times of 11 July claimed that the new draft would be published immediately following Cabinet approval. On 18 July, in his statement to the House when responding to my hon. Friend the Member for Dewsbury, the Chancellor of the Duchy referred to Cmnd. 2290, "Open Government", for a further definition of when disclosure would not be in the public interest. There are more than four pages of exemptions in that document, which the right hon. Gentleman claims is still under consultation more than two years after publication.

On 18 July, in response to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), the Chancellor of the Duchy said: I shall come back to the House during the debate"— that is, this debate— with perhaps more thoughtful proposals on how more generally we can either cross-refer or define those circumstances."—[Official Report, 18 July 1995; Vol. 263, c. 1484.] Now the Chancellor of the Duchy has fulfilled his promise. He has come back to us, and we shall study what he has produced with great care.

It would have been possible to range even more widely over the subjects touched on by the Chancellor of the Duchy, but I know that other colleagues want to contribute to the debate. I shall therefore say only that we are indebted to Nolan for making the recommendations on the subjects before us this evening. I am glad that the Government have taken most of them on board. I should be glad to hear what the Chancellor of the Duchy has to say about my submission that his recommendation on business appointments is rather weaker than Nolan recommended. I look forward greatly to future debates on the civil service in this House.

8.6 pm

Mr. Tom King (Bridgwater)

I know that the whole House will join me in welcoming the right hon. Member for Bishop Auckland (Mr. Foster) back to a more audible role at the Dispatch Box. I appreciate his remarks about the work of the Nolan committee. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) and I are the holders of a unique letter of appointment. Other members of the Nolan committee were advised of the expenses that they could claim for. We were advised that, as we were already in receipt of public funds, no money would be available to pay us for any of our work.

It would have been intolerable if Nolan's work had been consigned to the wastepaper basket. That is why I so greatly appreciate the role played by my right hon. Friend the Chancellor of the Duchy. His was not the most exciting speech that I have ever heard in the Chamber—he quite properly eschewed that—but he took us meticulously through the range of issues with which he has been dealing. Problems of standards in public life, and the leadership that we in the House ought to exhibit, are sometimes the subject of brilliant illumination, but more often they are matters of painstaking attention to detail of the type that the Nolan committee has performed.

Sometimes I think that these matters should not be the subject of so much party political exchange. This afternoon I resented the attitude of the Leader of the Opposition. He does no one any service by trying to turn these issues into acutely party political ones. On the contrary, they are in the main matters about which each and every Member of the House will have to make up his mind.

The committee's first report included 54 recommendations, to which the Government's response has been effective, more than adequate and prompt. I should like to put that clearly on the record.

I am glad that the Government accepted the recommendations about Ministers. I believe that that was right. I am not breaching any confidences by disclosing that there was a strong view across the Nolan committee that the procedures that existed for civil servants should be replicated as far as was sensible for Ministers. We recognised that there were differences for Ministers. Civil servants are in the main able to anticipate and plan their retirement. That is not always true of every occupier of the Front Benches.

I thought that the right hon. Member for Bishop Auckland was unkind in one respect. My right hon. Friend the Chancellor of the Duchy has said that Ministers may ask the advisory committee. He drew attention today to the word "may". He made the point that the committee was advisory and non-statutory. It seemed to me extraordinarily courteous of my right hon. Friend to say that he did not wish in advance to bind any other Administration that might at some long distant date possibly occupy the Government Benches.

He discharged his responsibility clearly and personally on behalf of the Prime Minister to make it clear that Ministers in the current Administration would be required and expected to ask the advisory committee about any appointment. I want to hear from the right hon. Member for Bishop Auckland an unequivocal pledge that, if at any time in the future there were a Labour Administration, the same requirement imposed by my right hon. Friend the Chancellor of the Duchy would apply to any Minister leaving a Labour Administration.

Mr. Derek Foster

I have no hesitation in giving such a pledge. I intended to say that I was grateful to the Chancellor of the Duchy of Lancaster for making it clear in his opening remarks about business appointments that the Prime Minister and the Government would expect Ministers to seek the committee's advice. That was a useful clarification of the guidelines issued on Monday.

Mr. King

I am grateful for that, as I know the whole House will be. The right hon. Gentleman may not be so pleased with what I am now about to say.

I resented very much the remarks that he made in reference to my right hon. Friends the Members for Witney (Mr. Hurd) and for Wiltshire, North (Mr. Needham). They were quite uncalled for. Although there was a brief mention of the issue in the tabloid press and other newspapers, once people had considered the matter, they observed that in both cases my right hon. Friends behaved with propriety. That is a good test. It is not a current issue at present.

My right hon. Friend the Member for Witney has gone to work for and make his experience available to a British bank operating in extremely competitive markets around the world. He will find George Shultz operating for the Americans. He will find French diplomats and politicians and German and Italian former leading Ministers who occupied different posts now seeking to assist their national economic effort.

I pay tribute to my right hon. Friend the Member for Witney. He could easily have gone off and written a few more of the excellent thrillers that he writes—indeed, I am sure that he will. He will be working full time. However, he will make his contribution in the economic field.

The real point that I want to bring out relates to my right hon. Friend the Member for Wiltshire, North. It is no secret—indeed, it is well known in the House and it is certainly well known in industry—that my right hon. Friend was an outstanding ambassador for Britain. He was a first-class Minister for Trade, many would say probably the best that we have had for a long time. He struck fear into our foreign competitors because he was extremely effective in the relationships that he established and the help that he gave.

I listened to what the right hon. Member for Bishop Auckland had to say. I do not impugn in any way his patriotism, which I respect, but the people who would have been most pleased to hear what he said are our French and German competitors. They would have liked to see my right hon. Friend the Member for Wiltshire, North told to do nothing for two years in the fields in which he worked.

It was in the interests of our nation that, as soon as my right hon. Friend left his ministerial role, he should make himself available in the fields in which he had operated to maintain efforts in exports, provided that he did not discriminate unfairly between one British company and another. I am not aware of a single complaint from a British company. My right hon. Friend's assistance is to the benefit of Britain and many of our constituents who work in the factories that my right hon. Friend helped to obtain orders for in recent years.

As my right hon. Friend the Member for Wiltshire, North is good in exports, why should we wear a hair shirt as a country and ban him from taking any part in exporting? Why should he not do so, provided that he does not make improper use of information that he gained as a Minister? Although the system is not yet set up, my right hon. Friend checked with Lord Carlisle to find out whether he thought that it was improper for him to act in that way. His energies will be employed to support British companies. I believe that that is absolutely right. If Opposition Members say that that is wrong, their views do not coincide with the best interests of Britain.

Mr. Derek Foster

I have the highest regard for the right hon. Member for Wiltshire, North (Mr. Needham). We joined the House together. We were members of the Select Committee on Trade and Industry together. He was a very good Trade Minister. However, the right hon. Member for Bridgwater (Mr. King) shares the myopia of a good number of his hon. Friends in not understanding the outrage, not of Labour Members of Parliament—that is not of much significance—but of the people outside. They are tired of the long parade of former Ministers going to lucrative jobs in the City or elsewhere. They do not understand it, and they are fed up. That is the mistake that the right hon. Gentleman makes. It is the mistake that his Government are making and that the Chancellor is making in providing a weak scheme.

Mr. King

That was a monstrous intervention. The right hon. Gentleman talks about outrage outside as if it was not stimulated by the comments made in here. He is at it again. It is disgraceful. No one in America said to James Baker when he went to work for the company for which he now works that he must not do it. George Shultz, who was a distinguished Secretary of State, worked for Bechtel. My old sparring partner, Dick Cheney, the former United States Secretary of Defence during the Gulf war when I discharged the role of Secretary of State for Defence, is now president of a major international company called Haliburton, a United States company. No one in America suggests that he is feathering his nest. There is a respect for such people of ability, who made a sacrifice for a period.

The right hon. Member for Bishop Auckland must know from his previous incarnation as Chief Whip that many people in the House make sacrifices to be Members of Parliament and represent their constituencies. They do not receive the financial rewards that they could enjoy in outside activities. My right hon. Friend the Member for Witney certainly made sacrifices for many years when he worked for his constituents and in the Government. Yet manifestly he is capable of making a much greater contribution and could have advanced himself considerably more than he did.

Mr. Richard Shepherd

The United States has much tougher rules and regulations on employment after government service. The key is the rule about employment in a related field. The anxieties expressed are invariably about people going from a field of activity in government to a private sector company operating in a related field. In the United States, to do so is a criminal offence and could result in a prison sentence.

Mr. King

My hon. Friend knows that that is precisely the point that we have tackled in the Nolan committee. That is why we say that a system must be set up to make sure that there is no abuse. But if the matter is taken to the ultimate political correctness, it will be manifestly to the disadvantage of this country. That is why I am attacking that attitude. I think that the right hon. Member for Bishop Auckland understands that point.

Mr. Mackinlay

The right hon. Member for Bridgwater (Mr. King) and, to some extent, my right hon. Friend the Member for Bishop Auckland (Mr. Foster), seem to be overlooking one fact. Part of the concern felt outside the House is due to the fact that people take up lucrative jobs to which they give a considerable amount of energy and enthusiasm while, at the same time, remaining as members of the legislature and receiving £33,000 a year. George Shultz is not a member of Congress; he has given up his role in government and the legislature.

In Poland, where there is a developing legislature, if politicians decide to take jobs outside the Administration, they take only half their legislative salary. Such action gives a signal to the electors that the politicians have another interest. I am not trying to say that it is wrong for people to have other jobs—

Madam Deputy Speaker (Dame Janet Fookes)

Order. The hon. Gentleman is trying to make a speech—he should be making an intervention.

Mr. King

I think that I have got the hon. Gentleman's drift. If he reads the Nolan report, he will see that we set out clearly at the start that we believe that this House is a better place and serves democracy better because its Members do not have limited backgrounds without a wider range of experience or the capacity to embrace other activities.

Last night, in another place, Lord Jenkins made a speech on the Griffiths report, the Lords' version of the Nolan report. That experienced former Labour Member of Parliament and Minister, who subsequently joined another party, was passionately in favour of not having full-time Members of Parliament. He recognised the importance of having Members of Parliament with outside experience and interests to bring to the House.

It should also be possible that ex-Ministers—but only subject to vetting—take up outside interests. It is right that the arrangements that we proposed and that my right hon. Friend the Prime Minister accepted should be incorporated in the guidelines. This is the right step to take, so that the experience of those with outside interests can be used to benefit our country.

8.21 pm
Mr. Robert Maclennan (Caithness and Sutherland)

If my speech concentrates mainly on criticisms or questions, I might give the distorting impression that I do not broadly welcome the Government's response to the Nolan committee's report. I welcome it because the committee has moved quickly, and across a broad canvas, to tackle matters of considerable significance to the running of our democracy.

I listened with great interest to the right hon. Member for Bridgwater (Mr. King), who has given much time and effort in the past year to a job for which he received no pecuniary reward. Perhaps he, like the former Foreign Secretary, the right hon. Member for Witney (Mr. Hurd), made sacrifices in order to carry out that job in the public interest.

I take issue with the right hon. Member for Bridgwater if he seeks to rest his argument too heavily on comparisons with the United States, which has a different political culture. In the United States, it is common for senior figures from industry to parachute into the executive arm of government and then return to industry. It is not—or has not historically been—so common in this country for such moves to be made.

I strongly agree with my noble Friend Lord Jenkins that it is desirable for people with a wide experience of life outside Parliament to contribute to our debates in the legislature. I would deplore the development of purely professional Members of Parliament, who start as researchers, graduate up the ladder of preferment to Cabinet office, then move out into some other lucrative job. That would not produce a House of Commons that truly represented the nation's interests. There has been some homogenisation in the House since I first became a Member of Parliament nearly 30 years ago. There is less diversity of background among Opposition Members, and also among Conservative Members.

The Nolan committee worked rapidly and carried out a firefighting job. Due to the tone of today's debate we have almost forgotten the circumstances in which the committee was set up. There was widespread concern about a number of highly publicised episodes involving Members of Parliament and Ministers, which caused the widest unease and created the sense that standards were slipping. There was a sense that many of the conventions on which our democratic workings rested were inadequate to cope with the temptations of modern, competitive, entrepreneurial life.

Those concerns were justified. I note that the Nolan committee said that the majority of Members of Parliament were upright citizens and not reprehensible—I am sure that is true. But the spectacular cases that came to our notice—some of which are still under consideration in the Privileges Committee and some of which are under scrutiny in the Scott inquiry—made it imperative that the Government move quickly.

We must not believe that the Nolan report, as published, can be the last word on the matter. The Nolan committee produced a good report quickly, but it was a report in time and we live in a fast-moving world, so we must return to reconsider some of the issues in a different context. The firefighting job, which was done so well by the Nolan committee, does not get to the root of many of the problems.

It is not possible in the ambit of today's debate fully to explore the necessary alternative approaches, but I shall allude to them, as I did in my evidence to the Nolan committee. Today's world needs more checks and balances built into the system. We need greater scrutiny of Executive action by the courts—a trend that has already accelerated in the past decade—and a greater sense of constitutionalism underpinning the conventions that have been taken for granted and have been found inadequate.

Constitutionalism requires the acceptance by all arms of government that there are limits to the power that the Government can exercise, and that those limits are defined by society, enjoy the acceptance of society and should not be transgressed. That sense does not permeate our system as it does those of most of the developed democracies.

We have sometimes taken pride in the fact that we have a flexible, quickly developing unwritten constitution. The down side of not having a written constitution is that there are no agreed norms of public behaviour on which we can rely.

It is interesting to see from the agreed code of conduct for civil servants, one of the achievements of this exercise, how we are still hung up on the Victorian constitution and the concept that civil servants' first loyalty is to Ministers of the Crown. In a certain mechanical sense, that is undoubtedly true, but in any other country civil servants' first loyalty would be to a written constitution to ensure no transgression of authority and no unintended use of powers. At all times, that would be their overriding responsibility.

I was interested to notice that we have taken a small step towards recognising some overriding responsibility that goes beyond that of loyalty to Ministers of the Crown—the reference in the code of conduct to loyalty being subject to the provisions of the code. That is a most helpful step, because it means that what Ministers see as being in the public interest is not the last word. The code defines general principles that could override the Minister's perception of where the public interest lies.

I come now to some matters of detail that I hope the Minister will be able to clarify when he replies. He may already have made some announcements on these matters that I have failed to note. The first refers to the only matter in the report that deals with Members of Parliament—bribery. It states that the law on bribery as it impacts on Members of Parliament is rather obscure and the Select Committee, set up to consider standards in public life, asked that the matter should be referred to the Law Commission. The Government undertook to do that following the debate on the matter. We have had that debate, so I now ask the Minister whether the matter will be referred to the Law Commission. It would be helpful if it were.

Mr. Mackinlay

It is interesting that, if the Law Commission proposes a Bill in respect of the bribery of Members of Parliament, following a decision of the House earlier this evening, the Second Reading of that measure will be taken not on the Floor of the House but in Committee.

Mr. Maclennan

As the hon. Gentleman says, that is interesting.

I come now to the responsibility of the Prime Minister for his Ministers' behaviour. This is an area in which the Government appear to have rejected the recommendation of the Nolan committee. In paragraph 13, on page 49, the committee recommends that the first paragraph of "Questions of Procedure for Ministers" should be amended to say that it will be for the Prime Minister to determine whether Ministers have upheld the highest standards in any particular circumstance.

The reason given by the Government in their White Paper for departing from that seems specious and somewhat disturbing, not only theoretically but in practice. The reason given is that it will go too far towards suggesting that the Prime Minister's relationship with his Ministerial colleagues is that of invigilator and judge. And it would not reflect the responsibility that Ministers should have to justify their conduct to Parliament. That reflects a confusion among Ministers. Parliament has no role in appointing Ministers, nor any responsibility for the way in which they conduct themselves. It can show its displeasure and it may diminish a Minister's reputation, but it would be historically unusual for Parliament to eject a Minister on grounds of conduct. That responsibility lies with the Prime Minister, and that should not be avoided.

However, that creates an immediate practical problem. If the Prime Minister shrugs off that responsibility and says that it is not for him, who is responsible for deciding whether the behaviour, against which a complaint has been made, is acceptable or unacceptable? That reflects a couple of unfortunate episodes involving the Cabinet Secretary in which he was called upon to investigate allegations of ministerial impropriety and to pronounce. That is a road down which we should not go. To have permanent secretaries or Cabinet Secretaries pronouncing on the behaviour of Ministers seems to be to ask them to exercise a political function or even a quasi-judicial function that will not strengthen the independence of the civil service. I ask Ministers to look again at that point rather carefully.

With regard to the conduct of and procedure for Ministers—I am not trying to make fun of an earlier exchange between the Leader of the Opposition and the Home Secretary—I wonder whether there is a genuine confusion in the Government's mind on the question of accountability and responsibility. The new rules for the conduct of and procedure for Ministers that are set out in the Government's White Paper speak of Ministers being accountable to Parliament for the policies, decisions and actions of their departments and agencies". That seems on the face of it to be a clear statement, but it does not lie nicely with the statement made by the Home Secretary in the House on 19 October when he said: I am personally accountable to the House for all matters concerning the Prison Service. I am accountable and responsible for all policy decisions relating to the service. The director general is responsible for day-to-day operations."—[Official Report, 19 October 1995; Vol. 264, c. 517.] If that kind of distinction made by the Home Secretary on that occasion between accountability and responsibility is sustained, it makes almost complete nonsense of the effectiveness of the new code of conduct and procedure for Ministers, which claims, I repeat, that Ministers are accountable not only for policies but for decisions and actions of their Departments and agencies. There is a need to clarify the exact rubric under which Ministers are acting in that area.

With respect to the question of Ministers' business appointments, on which I intervened in the speech of the Chancellor of the Duchy of Lancaster, I do not wish to labour the point, but it is clear that Nolan recommended that there should be an automatic waiting period of three months before Ministers took up their jobs. It made the point specifically and it was right to say that three months would not affect any question of misconduct—it would not mean that bad behaviour was less or more likely. But it referred to the perception of simply eliding the responsibility of Ministers into a new business job. It spoke clearly on that issue. There was no question of it being a discretionary matter on which advice should be sought. It was automatic.

In that, the Government seem to have departed from what was recommended, and that is a mistake. Whether we like it or not, even in the case of the most public-spirited Ministers who have, to use the words of the right hon. Member for Bridgwater (Mr. King), experienced sacrifice—I think that he meant financial sacrifice as Secretary of State for Defence because it is hard to think what other sacrifices were involved, although perhaps family life and a number of other things could be said to have been sacrificed—there is much to be said for an interval of three months. There is also much to be said for suggesting that it will not deprive the public of services of value if such a person takes a holiday for three months before taking up his new job.

We have made remarkable progress on the civil service in recent months, but I do not think that that can be the last word. What we have is not exactly a whistleblower's charter. There are some interesting questions to be discussed about civil servants' duties. Under one of the provisions of paragraph 11 of the new code—as I read it—civil servants have a duty to disclose illegalities and criminal behaviour, but that is the extent of their disclosure duty. They are permitted to communicate observations of other behaviour that is outside the terms of the code, but they are not required to do so.

It is at least arguable that, in the public interest, there should be a duty—I would not like to define it tonight—to disclose other matters that come to the attention of civil servants: behaviour that might not be illegal, but whose consequences might be hazardous to the public or the environment, for example.

As the Minister said, much of the report is devoted to quangos. I probably would not do the House a favour by devoting a further 10 minutes to that subject; I shall simply say that, although admirable steps have been taken to ameliorate the current system, I do not think that setting up quangos to vet quangos is the whole answer. As the Minister will know, I consider that many of the responsibilities of quangos ought to be transferred to elected bodies as soon as possible, but it may be beyond the scope of this debate to explore the constitutional changes that would be necessary to achieve that.

I feel that Parliament, rather than an appointed body, should vet some of the more senior appointments that are made—and may properly be made—by the Executive. I have in mind major jobs such as that of Director General of the Prison Service. If Mr. Derek Lewis, for instance, had had to give an account of himself to a Select Committee of either House, the arguments for and against would have been fully deployed and considered, and there would have been a greater degree of public consent behind his appointment. I suspect that, if that had happened, the circumstances surrounding Mr. Lewis's appointment would not have been unravelled in a manner which, whatever the outcome, could not have been other than embarrassing to the Government.

Mr. Mackinlay

George Shultz's appointment had to be confirmed by Congress.

Mr. Maclennan

To go through the procedure of advise and consent would be to risk falling into the trap into which—with presumption—I advised the right hon. Member for Bridgwater not to fall: the trap of trying to extrapolate from American experience and apply it here. Nevertheless, there is much to be said for adapting such a process of consideration.

I end as I began, by expressing my satisfaction that so much has been done in such a short time.

8.43 pm
Mr. Giles Radice (Durham, North)

I welcome the two new faces on the Opposition Front Bench. They have become "shadows", but I congratulate them on coming out of the shadows and emerging from the Trappist corners to which they were previously confined.

I shall make a very short speech. I know that my hon. Friend the Member for Hartlepool (Mr. Mandelson) will be pleased about that, because he will be making his maiden speech, and should be given every opportunity. I shall confine my remarks to the civil service code, about which I spoke in our March debate.

I welcome the draft code produced by the Minister on 30 October. In almost all material respects it is the same as the Civil Service Sub-Committee's code, as published in the report of the Select Committee on the Treasury and Civil Service. I am pleased that it has been broadly supported both by the Government and by the Opposition parties, and endorsed by the Nolan committee, with minor but useful modifications. The main modification was that the draft civil service code should be revised to cover circumstances in which a civil servant, while not personally involved, is aware of wrongdoing or maladministration taking place. I consider that a sensible modification. Following consultation, the code has now been published by the Government and will begin to operate in 1996.

There has been widespread support for the code due to the general recognition of the importance of an impartial, non-partisan and non-corrupt civil service. It is recognised that that is a priceless gift which is very important to our democracy. There was a feeling that, at a time of great managerial change, when the civil service was being fragmented, we needed to re-emphasise and endorse the underlying values that we had all accepted in the past.

I am not making a party political point here, but when a party has been in power for a long time—as the Conservative party has—it is necessary to state again that the civil service is not the prerogative or preserve of any one party. That, too, was part of the motivation for the code. I suppose it is also true that civil servants occasionally begin to feel that, if a party continues to win elections, it will always do so, which can affect the advice that civil servants give to Ministers.

The code has two main merits. First, it sets out clearly and in one place the responsibilities and duties of civil servants, and the responsibilities and duties of Ministers in relation to civil servants. That has not been done before. Secondly, it provides for the first time an independent appeals system for aggrieved civil servants, protecting them against misuse of their services by Ministers.

I cannot pretend that it was merely the merits of our arguments that won the day. We have all described the Scott inquiry as hovering over Parliament, Government and the civil service like a cloud or a sword of Damocles. I think that the Government felt the need for a response to be prepared beforehand, which was very sensible of them. They therefore changed their mind about the code. After spending about 18 months arguing against us, and sending the head of the civil service to argue against us, they suddenly said, "Well, actually we have changed our mind and we accept your position." I do not criticise the Government for that; in fact, I congratulate them on such sensible action.

That emphasises the need for consensus in our views of the civil service. The principles that we have been discussing—the concept of an impartial, non-corrupt, non-partisan civil servant, for instance—should have the support of all parties in the House. The civil service is not the property of a single party, and it should not be made into a political football by Opposition parties either. It is very important to us. I firmly believe, and always believed while I was Chairman of the Sub-Committee, that there should be consensus for advances and reforms in the civil service. I tried to broker that. It broke down after 1992, but until then there was consensus, and it is important that such a consensus should again be built up and maintained. We set an example in the Sub-Committee which others have followed. I hope that they will continue to follow it.

My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) spoke of the possibility, which I think is now a probability, of the functions of the Sub-Committee being transferred to a new Select Committee. This is not the time to make jokes about why the new Deputy Prime Minister needs his own Select Committee, although I am sure that he does because he is such an important person. I hope that the new Committee will have all the functions of the old Sub-Committee and that none will suddenly fall by the wayside.

In particular, I hope that the Cabinet Office will still be under the purview of that Committee. From time to time, we should also be able to look at quangos in the same way as the Sub-Committee looked at them. Nobody else will do that if we do not, and I see it as within the purview of the new Committee.

Select Committees come in for a great deal of stick. I have read the brilliant, well written book by the political columnist of The Independent, Andrew Man. It is called "Ruling Britannia". I am not Mr. Marr's agent, but I advise hon. Members to read it. He says that Select Committees have not really proved to be a great success and that television and radio programmes are far more effective watchdogs of democracy.

I see his point and I accept that the Select Committee system has faults. They are only as good as their members, but they have one priceless advantage over television and radio: we can send for persons and papers. We can call the head of the civil service to explain why he is not in favour of having a code of practice, and his arguments begin to sound rather silly. The head of the civil service will not appear on "Panorama" or "Newsnight" and will certainly not be investigated over a long period. We have that advantage and we must press it home because it is very important for our parliamentary democracy. We can also make lengthy and detailed investigations.

The Nolan committee was set up because people were worried about standards in public life. That was damaging to our democracy and it is still potentially damaging. That is why it is important to get these matters right. Clearly, Monday's debate will be important. However, we must not go to the extreme of saying that no parliamentary weapon is any good at all. The Select Committee system is potentially a weapon of considerable value to Parliament and to our democracy.

8.53 pm
Dr. Tony Wright (Cannock and Burntwood)

Having just voted for shorter speeches, I shall do my best to make one. It is not unusual for Governments to set up committees. Sometimes they do it because they want a committee to provide an answer that they already know, sometimes it is to kick an issue into touch and sometimes it is to avoid a crisis that is enmeshing them. Usually the reports from such committees gather dust because the crisis has gone and things have moved on. Nolan is different. There was a crisis and setting up the Nolan committee was certainly the response to it, but that committee is different because it has delivered and it will not go away. It has made an impact on the way in which we practise politics in Britain that will be there for ever. Out of one crisis and one set of circumstances, quite fundamental changes are taking place.

Nolan responded with urgency and in a way that has enabled the Government to act quickly. Because the committee was set up on a standing basis, its influence will go on being felt in all the areas that it examines. That is one of the reasons for some Conservative Members in their private moments telling us that they find it hard to forgive the Prime Minister for setting the committee up in the first place. It is not just a source of immediate difficulty: it will be a source of continuing difficulty for them.

There will certainly be continued displeasure by those isolated Conservative Members who brought the House into such disrepute that a system has to be put in place which will have the most fundamental consequences for the whole of our democracy. That is good, but some hon. Members, and especially some Conservative Members, will think that it is bad. From this small beginning something large is beginning to emerge.

Nolan acted impressively and did in six months what the House has been unable to do over many a year. When I gave evidence, I could not persuade the committee to set up a public appointments commission to put the appointments to quangos on the same basis as those to the civil service, but the committee came close to what I wanted in the emergence of a proposal for a public appointments commissioner who will add an independent element to the process. What an indictment of the House it is that we have had to wait for Nolan to make proposals that over the years the House could have made on all the fronts and issues with which the Nolan committee concerned itself.

In a statement about Members' interests which could apply across the board, Nolan says: The overall picture is not one of an institution whose Members have been quick to recognise or respond to public concern. That is a masterly understatement on the nature of an institution which has caused this crisis to arise and which has required outside intervention to put it right. The partisan way in which the House is even now responding to Nolan underscores the point.

For a long time, the Government simply wanted to brush aside all the concerns that hon. Members tried to raise about the issues with which Nolan was called upon to deal. The House and the Government refused to treat seriously Ministers going to boardrooms, patronage, quango appointments, the audit of public bodies or the interests of Members. The Government's response was to say that those were not great concerns, but when the crisis mounted they began to make minimal adjustments.

Statements started being made and papers produced of a minimal sort, but then the crisis got worse, until finally Nolan had to be invented. The Government, however, still took the same approach to the Nolan committee. They tried to persuade the committee that on those crucial issues they were right and those of us who had been saying something else were wrong.

The Nolan report comprehensively rejected what the Government were arguing on the key issues of business appointments of Ministers, patronage, the need for an independent element in quango appointments and the need for external audit. To all those things, on which the Government had refused to move, saying that they were right and we were wrong, the Nolan committee said that it could not agree and made a set of recommendations far closer to what the critics had been saying than to what the Government had been defending.

The high point of that process was reached when the Chancellor of the Duchy of Lancaster's predecessor gave his evidence. What an experience that was. The following morning, the Financial Times talked about it being "breathtaking in its complacency" and Peter Riddell said in The Times: David Hunt has seriously misjudged the Nolan inquiry. Over nearly two hours yesterday, his approach was a mixture of the blustering, the defensive and the partisan. He did not even seem to understand why it was necessary to set up the inquiry in the first place. That is bunkum and balderdash of a high order. It is no wonder that the former Chancellor of the Duchy of Lancaster has gone—presumably to the great boardroom in the sky.

Now the Government say—indeed, I heard the present Chancellor of the Duchy of Lancaster saying this all over the broadcast media yesterday—that they have accepted "all" the Nolan recommendations which apply to them; that was the theme. By this evening, however, the theme has changed ever so slightly. Now we are being told that the Government have accepted virtually all the Nolan recommendations which applied to them or, in one mode, all the major recommendations which applied to them.

I do not want to detain the House unnecessarily, but it should be put on record that in a whole lot of particulars, many of them important, the Government have chosen not to accept the Nolan recommendations. I will run through them quickly.

The Nolan committee wanted to make the Prime Minister the judge of ministerial conduct. Indeed, the only underlined sentence in the Nolan report is on that very point. Nolan says that it is "axiomatic" that the Prime Minister is the judge of whether a Minister has behaved properly. What have the Government done? They say in their response that it goes "too far" to make the Prime Minister the judge of that, taking away the one underlined statement to be found in the whole Nolan report about the pinnacle of accountability in the system.

Is that not revealing? It means that, so long as a Minister can get away with something politically in the House—and of course Ministers do so with majorities, as we have seen just recently—contrary to the Nolan recommendation, there is no role for the Prime Minister in having to come to a view on whether the conduct is honourable and consistent with being a Minister.

What about the three-month automatic waiting period for Ministers before they can take up business appointments? The Government response is to say that it "serves no useful purpose". Useful to whom? Useful to the public interest or useful to Ministers? Nolan said that there should be an appeal mechanism from Ministers to the Prime Minister and that, for the same reason as before, the Prime Minister should have a decisive role in relation to Ministers' ability to take up appointments and the conditions attaching to them. In their response, the Government say that there is "no constitutional need" for such a mechanism.

The Nolan report says that Ministers should keep a register of hospitality and that the register should be made available to the public. The Government response is to say that "no useful purpose" would be served by keeping such a register. The Chancellor of the Duchy of Lancaster nods. I shall be happy to give him the references if he wishes.

The Nolan report says that successful appeals under the civil service code should be reported to Parliament. The Government say that they should not and that we need to protect confidentiality. Nolan says that there should be regular surveys of Departments and agencies to ensure that they understand what ethical standards are and that those standards are being applied. The Government say that they should not be such surveys and that we should have "no prescription" on that matter.

Nolan says that records of invitations and hospitality offers should be kept by all Departments and agencies. The Government say that there will be no central prescribing in such matters.

Nolan says that reappointments to quangos should not be automatic. Indeed, that is so important that Nolan comments expressly and directly on the Government's own guidance for the health service. Commenting on the Government's national health service document, Nolan said: Re-appointments should not be automatic. The performance of the post-holder should be reviewed. A balance should be struck between maintaining continuity on boards and recruiting new members to inject fresh ideas. The Government have said that reappointments will be automatic. There will not be an independent element at the reappointment stage. When one considers that some of the worst abuses of patronage involve people whose reappointments are now being made, one sees how important that is.

I cannot resist quoting briefly from Simon Jenkins. Andrew Marr has already been recommended, but the Government will dislike it even more if I recommend Simon Jenkins. His splendid book, "The Nationalisation of Britain," is his verdict on the Conservatives' centralist years. Writing about Nolan in The Times, he says: As for the 15,000 health authority posts that had to be filled in 1991, it was the most undignified case of catch-as-catch-can in the history of public patronage. On seeing his list, one health administrator paraphrased Wellington and hoped they would 'terrify the consultants as much as they terrify me."' They are the people who are now being reappointed. Nolan said that they should not be reappointed automatically; contrary to Nolan, however, the Government have said that they will be.

Nolan says that the Audit Commission should have the power to publish public interest reports on national health service bodies. The Government say that they are considering that. The Government say that because advisory quangos, nationalised industries, public corporations and tribunals are not covered "substantively" in the Nolan report, they will not be within the Public Appointments Commissioner's formal remit. Yet we know that the subject of advisory quangos is extraordinarily important. There are more than 800 of them and they are concerned with the safety of medicine, what goes into food, whether things are regulated for the environment, and so on.

I shall not quote from it now, but there is a recent splendid report from Democratic Audit/Channel 4/Human Rights Centre, university of Essex entitled "Behind Closed Doors: Advisory Quangos in the Corridors of Power". It shows that there are important questions to be asked about the connections between those who sit on some of the important advisory quangos and the industries that they are regulating. The need for an independent element is crucial. The Government have taken the view, although they need not have done so, that advisory quangos will not be covered by the Public Appointments Commissioner.

Nolan says: The Public Appointments Unit should be taken out of the Cabinet Office and placed under the control of the Public Appointments Commissioner. The Government insist that that will not cover the PAU's role in advising the Prime Minister on a whole range of strategic appointments. However, we know from paragraphs 49 to 51 of "Questions of Procedure for Ministers" that in a whole range of appointments the Prime Minister's is the key role. Yet the PAU and the Public Appointments Commissioner are not to have a role in that respect.

We are told—this was raised by the hon. Member for Aldridge, Brownhills (Mr. Shepherd)—that openness codes were needed for bodies which fell outside the ombudsman's jurisdiction. The Government say yes, but because they are outside the ombudsman's jurisdiction there is no right of appeal against the denial of openness. That is different from the situation in relation to bodies which fall within the jurisdiction. The sensible thing would have been to extend the jurisdiction.

One of the obiter dicta of Nolan was that the ombudsman's jurisdiction should be extended. With great respect to Nolan, he got it wrong, but I know what he tried to say—that the ombudsman's jurisdiction should be devised in such a way that everything falls within it unless bodies are specifically excluded. The report actually put it the other way around, but that is what Nolan meant. That is what the Government are being asked to do, but no action has resulted.

We had a welcome clarification today on the question of procedure for Ministers and the withholding of information in the public interest. It was extraordinary that the Government's initial response included a provision to allow Ministers to withhold information on a blanket public information ground. That flies in the face of what the Government have been trying to do in identifying the criteria which would determine what the public interest was. I am glad that the Government have changed their mind about that.

Contrary to what the Chancellor of the Duchy would have us believe, the Government have not accepted all Nolan's recommendations. Indeed, on that quick count, 14 recommendations have not been accepted.

Finally, I want to make a general point. The Nolan committee rejected a statutory approach. It thought about it briefly, but said that we should continue doing things in a rather informal, British "good chaps" sort of way. I did not think that its rejection of a different approach was entirely convincing. There will be government by codes—probably there will be more codes than there are in the telephone directory. There will be codes for Ministers, civil servants, members of quangos and Members of Parliament—one has only to name it and there will be a code for it.

In fact, had a statutory approach been adopted many years ago, many of the problems could have been avoided. For example, back in 1976 the House was advised by the Salmon Commission that it should put the case of attempting to bribe Members of Parliament on a statutory footing. The House ignored that recommendation.

Some of the best things that Nolan said are about whistleblowing and its importance in ventilating concerns. I do not want to advertise my Whistleblower Protection Bill, but it contains a model of how codes must be supplemented by a framework and backstop of legislative protection. That is the model that we need, but instead we have a system that we make up as we go along. It is an informal system, but I want it to be on a more statutory basis.

Disraeli once said famously that this country is governed not by logic but by Parliament. Nolan is a departure from the usual way in which things are done. It is the beginning of a constitutional reform mechanism. I should like it to be converted into a permanent, constitutional commission. If we do that, the series of crises which began this process may result in our ending up with a modern constitution.

9.13 pm
Mr. Peter Mandelson (Hartlepool)

I agree with my good and hon. Friend the Member for Durham, North (Mr. Radice) that it is nice and, indeed, quite a relief to be out of the shadows. It is a great privilege to be speaking for the first time from the Dispatch Box, on such an important subject and in support of my right hon. Friend the Member for Bishop Auckland (Mr. Foster), who made a distinguished speech. On the Government Bench is the Chancellor of the Duchy of Lancaster and the Parliamentary Secretary, the hon. Member for Orpington (Mr. Horam), whom I knew slightly in different—I would not say better—times. I look forward to many courteous exchanges with both Ministers.

This debate, like the current controversy about the disclosure of Members of Parliament's outside earnings, has revealed that the Government are on the horns of a dilemma. The Government, correctly in my view, responded to public disquiet about sleaze by setting up the Nolan committee. In doing so, they raised immense public expectations that tough action would be taken. However, having tried to implement Nolan in full—I think that that is what he intended before the summer— the Prime Minister has run up against the all-powerful right-wing road block which seems to call all the shots in the Tory party these days. For them, Nolan is in crucial respects a crackdown too far. As a result, Ministers are facing the dilemma of either backing away from Nolan on the crucial points to appease the party, in which case they will infuriate the public, as we have already seen, or implementing Nolan in full, in which case they will have much more trouble on their Back Benches.

Surprise, surprise, our stalwart Prime Minister has chosen to swim with the tide of internal party opinion rather than stand up convincingly for the public interest. Caving in seems to have become a compulsive habit of his, whether on Europe, education vouchers, welfare cuts, asylum seekers or divorce reform. Instead of wanting to do what is right, he simply does whatever the right want him to do.

It is hardly surprising, therefore, that on Nolan, whether in relation to jobs for the boys for ex-Ministers, as it is regarded by members of the public, or Members' disclosure of their outside earnings, the public are beginning to ask what on earth the Tories have to hide. Why will they not come clean? Why cannot ex-Ministers face the same requirements concerning their business appointments as civil servants?

Let us not forget that it was the Prime Minister who set up the Nolan inquiry. I am sure that Conservative Members will reflect on the fact that we would not be here tonight—indeed, we would not be here next Monday night—if it were not for him. Let us also not forget why the Prime Minister took the action that he did. His Government seemed to be mired in sleaze. The reputation of public life looked set for ever to be tarnished by one revelation after another about this Minister or that wrongdoing. So the Prime Minister acted. He acted properly and well, and now I believe that Parliament, too, must act.

On matters affecting standards in public life, which we are debating tonight, our decisions must do three things. First, they must place the greatest onus of responsibility on elected public figures to act, and to be seen to be acting at all times, with total propriety and openness. It is nonsense that civil servants who advise should be placed under greater constraint and obligation than Ministers who decide, yet that is being proposed in the business appointment rules.

Secondly, the decisions taken must be completely clear and unambiguous: no "musts" becoming "mays", no woolly words, no clever drafting, no room for manoeuvre later and no get-out clauses. Above all, there must be no room for confusion in what is being proposed and what is being agreed. If there is, we will not be able to satisfy our third and most crucial duty, which is to ensure that what is done in the public's name and paid for out of the public purse is genuinely in the public's interest, not in the party's interest. That is especially important in relation to the growing army of special political advisers who are setting up shop in Whitehall.

I refer now to the business appointment rules. I must say straight away that I have considerable sympathy with the point made by the right hon. Member for Bridgwater (Mr. King) about the right hon. Member for Wiltshire, North (Mr. Needham). I do so for very strong personal and constituency reasons, for it was the right hon. Member for Wiltshire, North who took on and single-handedly fought off Chinese dumping of cheap magnesium products in Europe, and thereby secured the important magnesium works in Hartlepool—no mean feat and achievement. I pay tribute to him quite sincerely for that because when others, including his officials, were not interested, he was.

On the wider issue, there is no doubt about Nolan's intentions on the system for business appointments that should apply to Ministers. The report says: The civil service system is tried and tested … it provides a strong reassurance to the public. It should be applied to Ministers.

It is true that Nolan talks about applying the system "with some slight modifications", but members of the committee were clear about what that means—they said so in paragraph 36. Modification, they meant, was in respect of the role of the Prime Minister, who receives recommendations from the advisory committee on business appointments, not the general application of the system to Ministers.

Nolan says on the narrower issue of the Prime Minister's role: It might seem invidious…for Ministers who have just been dismissed by the Prime Minister to have to submit their future employment plans to the same Prime Minister for consideration. Given the circumstances in which many of the Prime Minister's right hon. Friends have had to be felled by the prime ministerial axe, one can understand why they might not want to have quite so much to do with each other in future.

Indeed, one might also say that in certain cases—the right hon. and learned Member for Putney (Mr. Mellor) comes to mind—submitting every subsequent job and each additional business appointment to the Prime Minister for his consideration would take a wholly disproportionate amount of the Prime Minister's time.

We can put aside the Government's view on that narrow issue of appeal, although I take very strongly the points made by my hon. Friend the Member for Cannock and Burntwood (Dr. Wright), who spoke with some force on the matter. The more important issue is whether the system as a whole in its basic operation for Ministers should be voluntary or mandatory, by which—incidentally—I do not mean statutory. I fully accept both Nolan's view and the Government's conclusion on that.

In their original response, the Government seemed to accept the obligatory basis of the system in its application to Ministers, but as my right hon. Friend the Member for Bishop Auckland said, they now seem to be saying that former Ministers may—rather than must—seek the advisory committee's view on their business appointments. That is a very important and fundamental shift by the Government away from what Nolan was proposing.

Let us be clear about that. It was not a sort of take-it-or-leave-it service that Nolan had in mind for Ministers. It was a proper, open and transparent regulatory instrument to ensure that all Ministers and private businesses would not be involved in playing footsie under the table, swapping favours or scratching each other's backs when their new recruit was in a Government office.

The only reason why the Minister has backtracked on this issue must be that some of his colleagues simply do not want to have to face the system. We must ask again: what have they got to hide? The scope for evasion under the Government's modified proposals is great in our view, and the system simply will not command public confidence unless the Chancellor of the Duchy of Lancaster makes it absolutely clear tonight that elected politicians are subject to the same discipline as unelected officials. I hope that he will promise to bring forward revised guidelines accordingly, or at least clarify what the Government have in mind, to the complete satisfaction of the Opposition and the general public.

I now turn to the civil service and the civil service code. The code owes its existence to the strenuous efforts of my hon. Friend the Member for Durham, North, who chairs the Treasury and Civil Service Sub-Committee. I pay tribute to his work and to that of the Committee. We strongly support the introduction of a code that sets out the principles and the framework within which civil servants undertake their duties. However, we believe that more specific guidelines are needed in addition to the general principles set out in the code if the code is to have real force and real bite. As my right hon. Friend the Member for Bishop Auckland said, the code must also be buttressed by legislation.

I draw the Minister's attention to one aspect of the code. On page 59 of the report, Nolan makes a recommendation—it could be called the whistleblower's clause—which states: We recommend that the draft civil service code should be revised to cover circumstances in which a civil servant, while not personally involved, is aware of wrongdoing or maladministration taking place". The Nolan committee also proposes deleting the words "within their control" from a sentence in paragraph 7 of the draft code, which reads: civil servants should endeavour to ensure the proper, effective and efficient use of public money within their control". In other words, if civil servants know of examples of wrongdoing or maladministration outside their immediate purview or control, they should be able to blow the whistle. I am interested to know how the Government view that recommendation, as I believe that it has very important implications for the operation of the protections in the code.

Let us put into perspective why such a code is needed. In comparison with many countries, our system of government is honest, open and untainted by corruption. I do not believe that anyone gains by pretending otherwise. I believe that our high standards owe a huge amount to the integrity and the devotion of the civil service. However, two serious problems have arisen concerning the civil service that must be borne in mind when considering the Nolan proposals and the draft code.

The first is that, as a result of the Government's desire to marry the public service culture with that of the marketplace in the operation of government, the ethos and the standards of the former have suffered at the hands of the latter. That is not to say that the operations of the civil service are immutable for all time—I do not think that they are—or that public and private cannot combine; I think that they can and they should. However, the system must be policed and regulated very carefully in order to ensure that the standards of the public service are not undermined by some of the sharper practices of the private sector.

The second problem arises from the fact that the Government have been in power for 16 years. That is too long for most people, and it is certainly too long for Labour Members. When an Administration has been in office for that length of time—I shall express my point carefully—there is a temptation for Ministers and civil servants to cut corners, to take certain procedures for granted and to slide into relationships with outside interests about which they would be more wary in other circumstances. That is bound to occur by virtue of the longevity of the Government's term in office.

Therefore, we must be very vigilant about using civil servants to perform party political tasks, such as writing conference speeches, briefing Government Back Benchers on party points and so on. I believe that the Chancellor of the Duchy of Lancaster should offer the House some reassurance on those points and outline what action the Government intend to take to curb any misuse or abuse of civil servants' time and talents for party political purposes.

The right hon. Gentleman should also understand that senior civil servants have become understandably worried about their job security and the political pressures on them in the light of recent events. I shall not go into the merits or demerits of Derek Lewis's running of the Prison Service, but the manner of his sacking raises some important issues for the civil service and for its terms and conditions of employment which Nolan does not cover in the proposed code of practice.

As we know, Mr. Lewis's appointment was summarily terminated in a letter from Mr. Richard Wilson, permanent secretary at the Home Office on 16 October. We all understood why he was sacked, but the contractual basis of his sacking was never made clear and it has not been made clear since.

I put it to the Minister that, as a result of that action, any official at that level in the civil service now must consider him or herself at risk of similar treatment. Does the Minister agree that such a threat—and it is a threat as it has happened once and it could happen again—exerts an insidious political pressure on senior officials to toe the line, or, in the case of Mr. Lewis, to carry the can or be fired?

If Mr. Lewis was not wrongfully dismissed—no doubt the Government will maintain that in response to the case that he is bringing—and he was not fired on the basis of his contract, the only way he could have been removed was by use of the royal prerogative.

The Government have stated in the past that the Crown's power to dismiss at will will not be used in practice and that they will abide by ordinary employment legislation. As I have raised the issue with him tonight, it behoves the right hon. Gentleman to clarify the position and give the House and the entire civil service an assurance that in future the Government will not use the royal prerogative to get rid of civil servants they do not like and whose faces do not fit.

I shall now refer to special advisers. There is a further source of real concern about developments inside Whitehall which Nolan touches on but does not delve deeply into—the Government's use of paid, political so-called special advisers. Such appointments have been made by Labour as well as Conservative Administrations in the past. I willingly accept that, in appropriate cases, they have a role to play, but the present Government are recruiting a veritable army of such people at enormous public cost, which is estimated at £1.5 million a year.

In reply to a parliamentary question, the Prime Minister said that £9 million had been spent on such people since 1988. We are entitled to ask what all that money is being spent on, how those people fit into the civil service structure and how they can be properly covered by civil service procedures and the civil service code.

Almost one third of the current flock of advisers have been taken on directly from Conservative central office. Are they helping Ministers in pursuit of better government, which would certainly justify the public expenditure involved, or are they merely assisting politicians in pursuit of their party careers, in which case the payment of their salaries should revert to Conservative central office?

Nolan rightly brought special advisers within the scope of the business appointments system, and we welcome that, but further transparency is needed in their employment and use. They are causing increasing concern and alarm among many in Whitehall. They have extensive access to confidential information and knowledge of future policy developments. Their value to business is therefore immense, as has been amply demonstrated by the traffic of ex-special advisers into well-paid lobbying and consultancy jobs.

Until recently, the Deputy Prime Minister's special adviser, Dr. Alan Kemp, was so useful to the private sector that he only worked for the right hon. Gentleman part-time, so that a business named Capita could employ Dr. Kemp the rest of his time. The company was simultaneously employing Dr. Kemp and tendering for lucrative Government contracts. That clear conflict of interests continued four years before it was stopped when the Cabinet Office rightly insisted this summer on ending that arrangement and forcing Dr. Kemp to choose between his public and business interests.

Mr. Spearing

Has my hon. Friend any knowledge of who has responsibility for the appointment of such persons—particularly the individual that he just mentioned—and for the terms of service that would allow split employment of that kind?

Mr. Mandelson

Such appointments are made on the personal fiat of the individual Ministers concerned, which raises an important issue in the case of another individual. If the Duchy has any doubt about the need for closer examination of the role of special advisers and of how they operate within Whitehall, the right hon. Gentleman should consider that very special of special advisers, Mr. David Hart at the Ministry of Defence—the so-called triumphant ideologue at the heart of Government, as he has been dubbed. That rings a bell, and that is among the nicer things said about Mr. Hart by the Tory-supporting press.

Mr. Hart has been at the Ministry of Defence for two years. He is apparently unpaid, yet he inhabits an office near the Secretary of State. Mr. Hart deals with a range of policy issues but his status is so ambiguous and arouses such suspicion that apparently he never attends meetings at which civil servants are present—no doubt so that they cannot question any advice that he gives. That itself raises a number of suspicions and sounds a number of alarm bells—that a special adviser cannot even sit down in the same room as civil servants because of the nature of his appointment and because of the character of the man. Mr. Hart is referred to as "independent", which is more than can be said for the Secretary of State, who apparently jumps every time Mr. Hart opens his mouth.

Mr. Radice

Did he write the Defence Secretary's conference speech?

Mr. Mandelson

Mr. Hart is in such a privileged position that his security pass takes him to the heart of the Ministry of Defence and gives him access—ordered specifically and personally by the Secretary of State—to the Ministry's classified information.

My hon. Friend the Member for Durham, North, not for the first time, is absolutely correct. Mr. Hart was involved in the preparation of the Secretary of State's disastrous speech at the Tory party conference, which alone should be ground enough for Mr. Hart's dismissal.

Nolan should take a keen interest in such invisible but clearly highly influential individuals at the heart of the Government, if only because that particular individual is viewed within Whitehall as such a dangerous character that—I have this on good authority—even the Prime Minister has tried to have Mr. Hart removed from his job. Of course, the Prime Minister failed.

Real civil servants, unlike the shadowy David Hart, are rightly respected for their loyalty and dedication to good government. They will no doubt serve the next Government with the same commitment and diligence that they do the present one. When we talk of the problems of maintaining standards of conduct in public life, we ought to understand that those problems would be much larger without the standards of integrity, independence and political neutrality that are the hallmarks of the British civil service.

The Nolan committee's proposals in relation to Ministers and civil servants, and, as far as they go, to special advisers, will strengthen our system of government. They should be agreed and implemented in full by the Government. I hope that the Minister will carefully consider the views expressed tonight by hon. Members on both sides, including those of the hon. Member for Aldridge-Brownhills (Mr. Shepherd). I hope that he will illuminate for us how the Government intend to implement Nolan in full, to the complete satisfaction of the British public.

9.40 pm
Mr. Freeman

With the leave of the House, I shall reply to the debate. The House will wish to congratulate the hon. Member for Hartlepool (Mr. Mandelson) on his maiden speech in his new position. We welcome him to it and look forward to vigorous debates with him. I certainly did not agree with 98 per cent. of what he said—

Mr. King

Ninety-nine per cent.

Mr. Freeman

I stand corrected.

One of the main thrusts of his speech was the idea that the Prime Minister had not displayed courage or conviction as regards Nolan. Nothing could be further from the truth. It was the Prime Minister who condemned the actions of some hon. Members, who set up the Nolan committee, and who then accepted its recommendations. [Interruption.] I shall deal in a moment with the point made by the hon. Member for Cannock and Burntwood (Dr. Wright). Therefore, there can be no criticism of the Prime Minister's actions: he has led from the front. He leads a united Cabinet, which has agreed in full the response to Nolan's recommendations for Government.

Both the right hon. Member for Bishop Auckland (Mr. Foster) and the hon. Member for Hartlepool raised an important and serious point, which I shall attempt to deal with briefly but clearly. They said that the guidelines should compel former Ministers to seek the advice of the committee, and presumably—although the hon. Gentleman did not say this—to follow the guidance that it offers. That at any rate was the logic of his argument about those separate but related points.

Nolan recommended an advisory system. The hon. Member for Caithness and Sutherland (Mr. Maclennan) implied that that system should march in step with the one for the civil service. I shall argue that it does—for instance, when it comes to the three-month waiting period. This is an advisory committee, which will report back to the Minister who seeks the advice. The hon. Member for Hartlepool did not suggest any sanction that could be imposed. Had he suggested one, I would have paid closer attention to rewording the document. There is no sanction, apart from the opprobrium of the House, the media and the public, if a Minister does not consult the committee or ignores its advice. That is a powerful sanction; I would argue that it is all that is required to be effective.

I gave a pledge, matched by one from the shadow Chancellor of the Duchy, that members of this Administration would consult the committee as and when appropriate. I hope that that statement will be taken at face value. I think that this will provide an effective system, just like the one for the civil service.

Mr. Mandelson


Mr. Freeman

When the hon. Gentleman participates in future debates, perhaps he will keep a careful eye on the clock and divide the remaining time in two. Tonight he did not quite manage the mathematics, so I hope that he will allow me to answer the debate properly.

The hon. Gentleman mentioned page 59 of the Nolan report—whistleblowing in the civil service. I am sure that he has read our response carefully, but perhaps I can repeat, for his benefit, that the Government have accepted the relevant recommendation and have put the relevant mechanism in place. The civil servant will first consult his permanent secretary. If he is not satisfied with that reply, he will then be able to consult the civil service commissioners. That is an important new step. I welcome it and I know that the House will welcome it.

The hon. Member for Hartlepool referred—in the House, so protected by privilege—in an unsavoury and unsatisfactory way, to Dr. Kemp and Mr. David Hart. As I have worked with both of them, I shall respond. Let me first say a word about special advisers.

The system was set up by a Labour Prime Minister. I hope that the hon. Gentleman spoke with the authority of the Leader of the Opposition on the matter. The procedure is simple. It is not all Ministers but Cabinet Ministers who appoint special advisers. They are civil servants covered by all the obligations imposed on a civil servant. For example, a special adviser is not allowed to campaign.

Mr. Mandelson

What about Mr. Hart?

Mr. Freeman

I shall come to Mr. Hart in a second. Special advisers cannot be overtly political. They cannot write in a journal. They cannot be prospective parliamentary candidates. Advisers employed on new contracts are now subject to the advisory committee on business appointments.

I hope that the hon. Member for Hartlepool will reflect on what he said about Dr. Kemp. I will read the record. I hope that he will take an opportunity to withdraw the hint of impropriety that he suggested in the activities of Dr. Kemp. That was not an honourable way to proceed, because the facts are otherwise. Dr. Kemp has behaved perfectly properly. He is one of the special advisers to my right hon. Friend the Deputy Prime Minister and I also work closely with him. Dr. Kemp was appointed as a full-time special adviser to my right hon. Friend when he took up his responsibilities in early July. There are certainly no justifications for suggesting impropriety in his previous activities as a part-time adviser at the Department of Trade and Industry. Proper procedures were in place to make sure that that did not happen.

The hon. Member for Hartlepool was right to say that Mr. David Hart is unpaid. Therefore, Mr. Hart is not a special adviser but a political adviser—a personal appointment by the previous Secretary of State for Defence, renewed by the current Secretary of State. Mr. Hart works with civil servants. I was Minister of State for Defence Procurement for one year, during which time, I sought Mr. Hart's advice about procurement matters on several occasions. He works with the civil service, frequently attends meetings at which civil servants are present and provides valuable advice on saving money out of the defence budget.

Mr. Mandelson

Will the Minister give way?

Mr. Freeman

No, I will not give way. I am answering the debate.

Mr. Mandelson

Why did the Prime Minister try to get rid of Mr. Hart?

Mr. Freeman

The hon. Gentleman asks from a sedentary position why my right hon. Friend the Prime Minister tried to get rid of Mr. Hart. There is not a shred of veracity in that suggestion. It is absolutely not true.

I apologise to the right hon. Member for Bishop Auckland on one point. I do not know why he received the answer to his written parliamentary question at 5 o'clock. I will look into the matter. I scrupulously try to make sure that hon. Members receive the correct information at 3.30 pm. Some of our systems for getting information to large numbers of hon. Members leave something to be desired, but it may have been our fault.

My right hon. Friend the Member for Bridgwater (Mr. King) dealt in a robust and admirable fashion with the implied criticisms of my right hon. Friends the Members for Witney (Mr. Hurd) and for Wiltshire, North (Mr. Needham). I wish to put it on record that my right hon. Friend the Member for Witney, a former Cabinet Minister, waited three months.

I remind the House of the tests. The tests were whether there was an act of favouritism, whether arty competitive knowledge was taken by the former Minister to the new job and whether there was any other specific, justifiable concern. The advisory committee on business appointments was not asked for informal advice because the system is not yet formally in place. However, Lord Carlisle, who chairs the committee, offered his judgment that the actions of my right hon. Friends were entirely consistent with what the committee would have advised.

The word "lucrative" is often used in relation to jobs. It is a pejorative term which is not worthy of proper, rational discussion about the system. [Laughter.] The right hon. Member for Bishop Auckland laughs. I am bound to say that the Labour party should exercise responsible leadership on the matter, as my right hon. Friend suggested. Perhaps we have to educate the public. We want former Ministers, Labour or Conservative, to return to the private sector for the good of the economy, and to be paid fairly and properly.

Mr. Derek Foster

What the right hon. Gentleman and his colleagues fail to understand is that the general public strongly favour the use of the word "lucrative"—£100,000 and £200,000 are regarded as substantial sums. That is particularly true when those sums are spoken of by a Government who are against the statutory minimum wage and who argue forcibly about low-paid workers being paid too much and pricing themselves out of a job.

Mr. Freeman

I can do no more than repeat the sentiments of my right hon. Friend the Member for Bridgwater, who said that all of us must understand the real world, and the salaries that are commanded and have to be paid in the private sector. The right hon. Member for Bishop Auckland has experience of that. If a job is to be done properly in the private sector, it should be fairly and properly rewarded. Talk of taking lucrative positions does not help the public debate.

The hon. Member for Caithness and Sutherland raised a number of issues, including the three-month period. My expectation and presumption is that that period will normally apply. The Nolan committee has not described the subject in detail, but some civil servants have been allowed to take positions within three months—for example, vice-chancellorships of universities. There may be parallel circumstances that should apply to former Ministers. It would be wrong to omit from the guidelines and the operation of the advisory committee the ability to be flexible in some circumstances. However, the presumption is that the period will normally be one of three months. As the House will know, former Ministers receive redundancy payment that lasts for three months, so there is some symmetry and logic in the arrangement.

Mr. Mackinlay

Will the right hon. Gentleman give way?

Mr. Freeman

I am sure that the hon. Gentleman will forgive me if I do not give way to him, as I should, as a matter of courtesy, respond to the points raised. If there is time, I shall certainly give way to him.

I am grateful to the hon. Member for Caithness and Sutherland for raising the subject of the bribery of Members of Parliament, and I shall refer his point to the Home Secretary, whose Department has responsibility for such matters. I am not aware that the issue presents an immediate problem to the implementation of the Nolan committee's proposals, but I take his point seriously.

There seems to be some confusion over the Prime Minister's responsibility. Obviously, Ministers must command the confidence of the House, and of the Prime Minister. If a Minister does not command the confidence of the House, he cannot sustain himself in the role of Minister. Such confidence must be sustained in the longer term—in politics I would define that as a matter of days, perhaps weeks. A Minister must command the confidence of the House—it may not agree with him, but it has long been the tradition that, in terms of his behaviour, a Minister must command the confidence of the House. Who sacks him? It is the Prime Minister.

The Prime Minister can sack a Minister for other reasons. The Minister might still command the confidence of the House, but not that of the Prime Minister; the Minister may be incompetent or unable to do the job properly, or his or her face may not fit. I see no problem—one of the clear reasons that we gave for not making the Prime Minister the sole arbiter and judge was to reinforce the need for a Minister to be accountable to Parliament, but that in no way reduces the Prime Minister's power to move Ministers when they no longer command his confidence or are not doing the job properly.

The hon. Member for Hartlepool raised the issue of accountability of Ministers and agencies. There seems to be much confusion about the underlying issues that needed to be considered or even reconsidered in relation to the responsibilities of Ministers and the chief executives of agencies.

The key point is that agencies are part of the civil service; they are part of a Minister's Department. The Minister is fully accountable to Parliament for the work of the entire Department, including any agencies. A Select Committee—I think the Treasury and Civil Service Select Committee—has recently suggested direct accountability to Select Committees by chief executives of agencies. That takes us down a difficult path.

At the moment, the Minister is fully responsible, including to the Select Committee, for the work of his Department. He does not have to accept the blame for every last action within his Department. That would be absurd. We would not have modern British Government under Labour or Conservative Administrations if that were the case. However, he is accountable.

The purpose of the framework document in creating an agency was simply to define what responsibilities could be delegated to the chief executive of the agency. I do not claim that we have it right in the case of all 109 agencies. I want to consider the experience that has accumulated during the past few years to see where improvements can be made. We do not claim that everything is perfect.

The hon. Member for Durham, North (Mr. Radice) talked about the civil service code, and I am grateful for his bipartisan approach. First, prodded by the right hon. Member for Bishop Auckland, I confirm that we want a Select Committee to cover the Office of Public Service, and it may be that related matters can be added to that definition. I hope that the right hon. Gentleman will continue in his helpful role to the House—I do not mean that in a partisan way—if a new Select Committee is set up. I hope that that Select Committee will have a sufficient remit to consider all the issues raised by the right hon. Gentleman.

My test of impartiality for a civil servant—it does not matter whether it is a permanent secretary or the youngest recruit—is whether he has the enthusiasm to work for an Administration run by different political parties. It is an important question. If I judge that the answer is no, that civil servant has crossed that line of impartiality, of objectivity, of service to the Crown but not to a political party. That is an important test. I believe strongly in an impartial civil service. It is not right—this is one reason for the civil service code commended by the right hon. Gentleman—ever to put a civil servant in a position where he is involved with, or supporting, a party political, narrow partisan activity, function or whatever. It is always a matter of balance and judgment, because hard-and-fast rules cannot be written, but I hope that I have given the thrust of my views.

I conclude by referring to the contribution of the hon. Member for Cannock and Burntwood, which in turn was repeated by the hon. Member for Hartlepool. I had not realised, and I apologise, that he is a graduate of that distinguished academic institution, Desborough primary school and, what is more, Kettering grammar school. I am the Member for Kettering. My only regret is that Shirley Williams abolished Kettering grammar school—I hope much to the chagrin of the hon. Member for Cannock and Burntwood.

Surprisingly, the hon. Gentleman criticised what he saw this afternoon as a partisan approach to the Nolan committee and then proceeded to make what I thought was largely a partisan speech. Nevertheless, he raised a number of important issues. I want to characterise the Government's response to that part of Nolan dealing with the role of Ministers—Government Nolan, as it is known—as a whole-hearted acceptance.

Frankly, it is not fair—the hon. Gentleman was straining at gnats—for the him to characterise our acceptance as rather grudging. It is not grudging at all. Where there is good reason to differ from Lord Nolan's committee, we have spelt it out. Lord Nolan is not God. Neither is my right hon. Friend the Member for Bridgwater a heavenly body—at least not yet. To assume somehow that everything that Lord Nolan and his committee said, in a rapidly produced report, must be taken literally, is foolish.

I shall read the record and, because of my high regard for the two academic institutions to which the hon. Gentleman went, I shall write to him with a full and proper response. However, I hope that the House is convinced that we have responded to Nolan promptly, whole-heartedly, with enthusiasm and, above all, correctly.

Mr. Bowen Wells(Lord Commissioner to the Treasury)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.