§ 3.5 p.m.
§ Lord McIntosh of Haringey rose to call attention to the growth of non-elected bodies; to the patronage system used by central government for their selection; and to the effect of such bodies upon local government; and to move for Papers.
§ The noble Lord said: My Lords, in rising to move the Motion standing in my name on the Order Paper I am conscious that there are a number of quite severe paradoxes in bringing such a Motion before 689 your Lordships' House. This is, after all, a House which consists almost entirely of people who owe their membership of it to patronage of one kind or another—in my case in the capacity of what is politely called "a working Peer" who was put on a list of names suggested by leaders of political parties—quite apart from the Honours Lists which are produced at New Year and on the Royal Birthday. I am quite conscious that I owe my presence in your Lordships' House to the patronage of the Labour Party. Indeed, a comparable arrangement with other parties exists for many other noble Lords who are present in the Chamber this afternoon.
§ In the case of noble Lords with hereditary titles, many were won originally for distinction on the battlefield or in other fields of public life; but a considerable number are rewards for past patronage in favour of their ancestors. There are noble Lords who find themselves here because they were part of Honours Lists at New Year or on the Queen's Birthday and there are others who find themselves here because of Dissolution Honours Lists. Many peerages are awarded for great distinction, but I think that most noble Lords will recognise that there is an element, at the very least, of the luck of the draw as to who is appointed to come to this Chamber. Indeed, there are many people of great distinction who are not Members of your Lordships' House, although they would adorn it considerably were they to be here. Therefore there is that paradox in the membership of this House when we are seeking to discuss the question of patronage in public life and the patronage of central government.
§ The second paradox I should like to mention comes to my attention through the Answers which Ministers have given in response to Starred Questions in recent weeks. I should like to say immediately that I recognise that when Ministers tell us that the number of quangos—that is, quasi-autonomous non-governmental organisations—has gone down by, I think, 25 percent. in recent years, I do not dispute that figure. The case for the Motion which I move today does not depend on the number of quangos which exist; what it depends on, and what gives it its force, are the scope and the power of those quangos and the scope and the power of central government in appointing people to organisations which have very much larger budgets and considerably more influence in public life than was the case 10, 15 or 20 years ago. I do not say that there was a watershed with the election of this Government in 1979. I consider that this is an issue which has affected public life all the time that I have been involved with it and, I have no doubt, for many years before that.
§ There is plenty of evidence that bodies appointed by central government have increased in their power and scope, and that there has been an increase in the ability and willingness of central government to use them for party political ends and in order to subvert the other estates of public life which in the past have been a countervailing force to the power of central government.690
§ I have no figures more recent than April 1987, but in April 1987 no fewer than 1,643 quangos existed. Those organisations had 148,700 employees. They had budgets of £7.1 million, of which £5.7 million came from central government. In addition to the number of employees, almost 44,000 appointments were made directly by Ministers or on behalf of Ministers. It is worth nothing that of those apppointments at that time—I doubt whether the position is any worse now—81 per cent. were men and 19 per cent. only were women.
§ In a study in 1986, the Labour Research Department—again I apologise that there are no more recent figures and if any noble Lord has more recent figures I shall listen to them with great interest—made comparisons between the membership of 22 large quangos in 1985, which was the most recent year available to it, and in 1979, when a Labour Government had been in power for a sufficient length of time to enable them to have considerable influence on the membership of those public bodies. What it noted over that period of time was that there was a considerable increase in the politicisation of those bodies.
§ If we look at the 22 chairs of the public bodies concerned, in 1979 six of them were directly appointed from among the ranks of the Labour Party. I suppose that I should add to that figure my noble friend Lord Shepherd who, although his chairmanship of the National Bus Company came more from his wealth of experience in business matters and interests than his Labour Party concerns, nevertheless remains, I am delighted to say, a member of the Labour Party. One of them was an active Conservative and two more were directors of companies which made substantial contributions to the Conservative Party. One of them was a Liberal and 11 of the 22 had no discernible political affiliations of any kind.
§ In 1985, by contrast, no chairman of those public major bodies had any discernible Labour or Liberal connections. There were however 13 w ho were either active members of the Conservative Party or considerable contributors to Conservative Party funds, whether active in politics on a full-time basis or because of their activities in business.
§ There can be no doubt that the politicisation of those major public bodies has been on the increase. I do not deny for a moment that it existed under a Labour Government. I do not deny that that has been a tendency which has been noticeable for a considerable number of years; but it has been increasing, is increasing and in my view should diminish.
§ Much of the talk about the membership of public bodies is on the basis of the Prime Minister's favourite phrase that in order to be a member of a public body, "You have to be one of us". Many of the examples which are most talked about in public life are those which are difficult to refer to in the House because the people concerned are Members of your Lordships' House, and especially when so many are not present. It would be invidious of me to refer to individuals. I shall not go through the usual list of bodies which it is claimed, and I believe with some 691 justice, have been subject to political influence in appointments to their management.
§ It is now well accepted that 10 Downing Street has considerable influence on who is appointed to bodies such as the Arts Council, the Board of Governors of the British Broadcasting Corporation, of the Independent Broadcasting Authority and to many university appointments—I am not referring to regius professorships—and to the governorship and membership of the court of the Bank of England. All those are common knowledge, but it is not particularly relevant to the Motion or to propriety in the House to go into them in more detail.
§ However, I should like to refer to those public bodies which directly affect something which is close to my heart and which I know is close to the heart of a number of noble Lords—the public bodies that affect the local provision of services in our community, especially local government. That is why a reference has been made to the issue in the Motion.
§ Let us take, for example, the supervisory bodies for the finances of local authorities. It is generally agreed that the Audit Commission is doing an admirable job, not just under its present director, but it did so under its previous director. The fact remains however that the present director was a special adviser to the Chancellor of the Exchequer before becoming director of the Audit Commission; similarly, the Commission for Local Authority Accounts in Scotland should have had, and did have originally, representations from the business community and central government and also from local authorities. There is after all only one local authority association in Scotland (the Convention of Scottish Local Authorities). During the whole time that that body has been established in Scotland only five CoSLA nominations have been accepted on to the commission. On the most recent occasion when there were vacancies, the Secretary of State for Scotland turned down all four CoSLA nominations.
§ Let us look briefly at the education world. The examples that I wish to give are not about local authority education, which, with the exception of the opting-out procedures, has not on the whole been greatly affected. Let us look at the city technology colleges which are intended to take away a significant part of local government from democratic control. Let us look at the Grant Maintained Schools Trust, which claims to have charitable objectives but somehow fails to have registered as a charity and is yet obtaining money from central government. Let us look, more importantly, at the Housing Corporation, which it is intended should take over from council housing—in other words, that it should become 10 times more powerful and yet have no democratic representation; at the residuary bodies which have taken over from the metropolitan county councils—others of my noble friends will refer to that matter—to the training and enterprise councils in local areas, which will take over the training functions that have been exercised by national bodies, which at least had trade union represen- 692 tation; and at urban development corporations, which take away planning powers from elected representatives. There are many more similar examples.
§ It is not just the people involved in those bodies who are of concern. It causes a great deal of disaffection in local areas where people have the feeling that their elected representatives, from whatever party, should have a say in what is happening in their area. It has two effects to which I wish to refer briefly. They are more important than the nature of the individuals or the way in which the patronage is exercised. First, it means a centralisation of policy-making. Whatever the intention, that is the effect. It means that policy-making and funding are taken away from local influence and local government and become the prerogative of Whitehall and of Ministers.
§ Secondly, there is a fragmentation of the service provision. If we look at the bodies that are responsible for housing in any community now, the responsibility is fragmented among housing associations supported by the Housing Corporation; in some areas the housing action trusts; in some areas still the local authorities and in some areas private landlords supported by the business expansion scheme. All that means that nobody concerned with community provision at the sharp end has any real idea of who runs what any more. There is no possibility for a co-ordinated approach to delivery of services. Although that is quite correctly subject to central government policy direction, the services ought not to be run on the ground in the local areas by the nominees of Whitehall, the nominees of Ministers or the nominees of any political party. That is the principal thrust behind our Motion this afternoon and that is why, my Lords, I beg to move for Papers.
§ 3.21 p.m.
§ Lord Bellwin
My Lords, perhaps I may say at once that I was never on an honours list at all; I came here not for services rendered but rather for services to be rendered. Whether or not I rendered them adequately is for your Lordships to decide, not for me.
In general I say at once that I much prefer services to be provided by local authorities. To that extent I find myself not in disagreement with the noble Lord, Lord McIntosh, and I hope that he would have expected me to say so. We cannot ignore the fact that the numbers of quangos are fewer than they were. I remember that my first task on arriving at the DoE was to be asked by the then Secretary of State to conduct an examination of the numbers of local quangos pertaining to local government in order to see how many we could abolish. I am glad to tell your Lordships' House that eventually we took from the statute book in excess of 300 such quangos.
It is fair to ask, "Why were they there for so long?" Some had been there for many years, some it has to be said, existed just in name. I concede to the noble Lord, Lord McIntosh, that those to which he referred were of much greater significance and importance. I shall address myself to them in a moment. Nevertheless we wiped out 300 quangos in one 693 department alone. As the noble Lord said, the number today, at least on the latest information that I have for 1988 from the Cabinet Office, has decreased since 1979 from 2,167 to 1,648. I believe that many more than the 500 have gone but in some cases they have been replaced by others. I shall refer to that later.
Whether or not one considers that such bodies are good or bad and whether or not one wonders why they exist depends on what we expect them to do, whether we approve or disapprove of what they set out to achieve and how that relates to what is currently being done or in some cases not done. I shall address myself in the main to what the Motion calls for—that which pertains to local government.
First, I especially wish to mention the two major urban development corporations which were set up to deal with the London Docklands and Merseyside development. They were the subject of tremendous controversy when they were set up, to deal, in the case of London, with some 6,000 acres of land. I am told that certainly for 50 years and maybe more, although it was less in some parts, that land had been derelict and in disrepair.
The question was this. If local authorities were given additional resources, could they tackle that problem? It was felt that they could not and I believe that was right. A major factor in the debate is that local authorities, especially the urban local authorities, have a whole range of services, many with inner city problems which have built up over the years. When we examine the situations with which they have to deal we realise that they must decide their own priorities for spending: whether more or less money can go to this or that service. I want to be charitable about this, because having worked in the field I know some of the problems. Often with the best of intentions those local authorities cannot do what they would like to do and have been unable to do.
As regards the urban development corporation, I accept what the noble Lord, Lord McIntosh, says about the desirability of problems ideally being dealt with by local people. This is an instance where it was not done by local people. I am giving them the best of motivation as they have gone along but they were not able to deal with the problems. Organisations were set up comprising competent and qualified people with know-how, and those organisations went across party lines. When we examine the original composition of the first Docklands Development Corporation team we find that people came from all parties and no parties. They had qualifications, experience and background. They were given resources and were able to apply themselves single-mindedly, with no distractions and no need to decide priorities.
The record shows that while we may not agree with all that has been done and we might have liked to have seen more of this and less of that, sitting here today some eight or nine years later we see a dynamic achievement and a cause for great pride to all the people who have been a part of the development. I am proud of the small part I played in helping to establish the project. As I have already 694 stated, I concede that it might have been nicer and easier if this had been accomplished in other ways. I do not think that local authorities were able to do it. What has happened since more than justifies the setting up of such an organisation with all the downside of it being a non-elected body, to which the noble Lord referred.
The Merseyside Development Corporation is about one-tenth the size. As I recall, it is some 600 acres. It has different problems but nevertheless I know some distinguished people on the corporation who have done a good job. If they have not achieved everything, they have achieved a great deal and will go on doing so.
As for the 10 mini-UDCs which have been set up and are now working, one of the happiest aspects is that they are, in the main, working very well with the local authorities. Who would have thought it? I am vastly encouraged because the elected members have decided very sensibly and responsibly to work together. They accept that they might have liked to have had additional money but they say, "The fact is that it has come here to our area"—I give way to the noble Lord.
§ Lord McIntosh of Haringey
My Lords, perhaps the noble Lord will permit me to intervene. He has already answered the point I was going to make. If the local authority is sensible—and these Labour local authorities are—it would recognise that the Government will only give money to their own appointees. They will not give it to elected local authorities. That is the realism that the local authorities have shown.
§ Lord Bellwin
My Lords, nevertheless I am encouraged by the fact that those bodies are working together. I remind the noble Lord that that was not always the case, although it is the case now. The areas controlled by those bodies are benefiting accordingly.
The great thing to remember about the urban development corporations, especially the 10 mini corporations, is that after about five years they are dissolved. They leave behind what they have achieved. That is kept within the community and is passed on to the elected members of a local authority. The urban development corporations are temporary.
The other day I spoke to a chief executive of a large Labour-controlled authority. He said to me that for all the talk of what this Government are supposed to be doing to the detriment of local authorities, he had never known his town and his authority to be so busy and to be undertaking so many activities. Heaven forbid that I should mention the name of that person. It may not do him a lot of good.
I want to stress that all of these bodies have accountability of the most onerous kind. They must be accountable, through Ministers, to Parliament. They have to follow strict audit procedures. I suspect that more than any other body these particular organisations are under scrutiny under the magnifying glass.
695 I know that my noble friend Lady Blatch can say a lot more on the new towns than I can as she has vast experience of them. However, the new towns themselves are unelected bodies. They are something of which the whole country can be proud. Their achievements are immense. When one sees the new towns, one must be impressed with their achievements. But I shall not say more on that now.
The noble Lord, Lord McIntosh, mentioned the Audit Commission. I remember when that body started. I remember the tough fight we had to get it accepted in your Lordships' House and the many battles that were fought. Yet, at the end of the day, even the noble Lord, Lord McIntosh, conceded that it does a fine job. It is respected by local authorities. It may not be liked by everyone as it is of course a watchdog. The first director appointed to the Audit Commission was called Mr. Banham. He has now moved to other things. No one could ever have said that Mr. Banham leant towards any particular government, least of all the Conservative Government. The Audit Commission does a great job, but time does not allow me to speak further on it.
I must now refer to the patronage point. The noble Lord, Lord McIntosh, must have had his tongue in his cheek when he touched on this, although I thought he put his case very honestly. I did a little homework and was amused to find that in 1977, 39 members of the TUC General Council held office in 180 quangos. I have found that many of the heads of the nationalised bodies are now Members of your Lordships' House. I will not name them; they are not present and that would not be fair.
§ Lord McIntosh of Haringey
My Lords, I am grateful to the noble Lord for giving way again. I have a very quick point to make. The research in 1986 to which I referred showed that by 1985 there were more Old Etonians than trade unionists on these 22 bodies.
§ Lord Bellwin
All I can say is that the research was just catching up with them. I should make one reference to something which Roy Hattersley, then a member of the Labour Cabinet, said in a radio programme in June 1978. It puts the "party political ends" point in context. He said:By and large, having set up the National Enterprise Board, or the Price Commission, or the Monopolies Commission, or the General Medical Council, I would want to believe that I'd so equipped it in terms of the membership that they took the right decisions, and I would think it extraordinary if nine times out of ten I didn't want to endorse their recommendations".So much for politically independent bodies run by politically independent people. One could go on at some length on this and I wish we had more time to do so. However, I think what really matters at the end of the day is the point that Peter Walker the Secretary of State for Wales made in another place in a Written Answer to a Question about the information that he sought concerning candidates for public appointment. On 21st October 1988 at col. 1016 of the Official Report Mr. Peter Walker replied:Prior to appointment we seek details for candidates' past and present occupations, relevant specialisms, areas of interest, 696 previous or existing appointments or voluntary service, time availability for public duties and ability to speak Welsh.Once appointed their performance is regularly assessed and certainly taken into account before any decisions are reached on either reappointment or further appointments".On a personal note, I should say that one of the tasks that I had in Government was to look at the reappointment of a Member of your Lordships' House who was the chairman of one of the bodies about which we are talking. We decided he was doing such a very good job that we had no hesitation in reappointing him, despite the fact that he sits on the Labour Benches.
I understand the thrust of this debate. As I said at the beginning, I am not without sympathy for it. But if local government is to retain its autonomy to a greater extent than it has been able to do in the past, it must do all the things it was statutorily set up to do. If it concentrates on that and does not digress from it, some of the more outrageous things that have happened in local government in the past will occur less frequently in the future.
§ 3.39 p.m.
§ Lord Bottomley
My Lords, it affords me pleasure to take part in a debate in which many of my noble friends are playing their part. The noble Lord, Lord Bellwin, who has just spoken, was very helpful to the town of Middlesbrough when he was a local government officer. As a local government leader he was outstanding. However, I regret to say that since he left local government and became a Minister and then came to this House, he has never lived up to those high standards.
The noble Lord, Lord Jenkin of Roding, and I worked together in the same district. The noble Lord has great knowledge of local government. It is my belief that if he had been able to pursue the policy in which he believed, local government would not be in the weak position that it is today.
When the noble Lord, Lord Rippon of Hexham, was Secretary of State for the Environment, I told him that we should do something to remind the public that our democratic society won through to victory in the last war. I told him that one way in which he and I could make a contribution would be to get a statue as a tribute to Attlee placed in the House of Commons Members Lobby. The noble Lord, Lord Rippon, was very enthusiastic. Both of us in due course were present at the ceremony when Attlee's statue was erected.
I became a member of Walthamstow Borough Council in the late 1920s. In 1945 I became the mayor of that council. That just shows how old I am getting. The council was very representative. It included civil servants, teachers, trade union officials, factory workers and housewives. Those people provided a very high standard of local government services for housing, schools, public cleansing libraries and museums. Three members of that local council eventually became members of the Labour Government in 1964.
Walthamstow Borough Council was able to experiment in providing other services. It provided one of the first maternity hospitals in the country 697 and one of the first day nursery schools. In the field of education it also introduced a system whereby two central schools were selected in which the school-leaving age was increased to 16, a forerunner of the national increase in school-leaving age to 16.
Thus local government can experiment in the introduction of social services of one kind or another which in due course could be adopted nationally.
A good example of how local government serves the public is provided by my own war-time experience. I was chairman of the Air Raid Precautions Committee after the passing of the 1935 Act. When war broke out in 1939 we were ready to meet enemy bombardment. The first fire-watching scheme in the country was introduced by me, as a trade union officer with the National Union of Public Employees, and the town clerk of Westminster, Parker Morris—the father-in-law of Lord Jenkins of Hillhead.
I became very active in the civil defence service and when Winston Churchill became Prime Minister I was invited to become a deputy regional commissioner for the South-East of England. There were 96 local authorities and the task of the commissioners was to co-ordinate their work and liaise with the Army and the police. That could not have been achieved by central direction. The work done by the local authorities was outstanding and the late King George VI acknowledged it by sending a personal letter to each of the commissioners. That answers the Prime Minister's contention that local authorities are not accountable, are inefficient and irresponsible.
Over the past 50 years, local authorities of all political persuasions have carried out their duties efficiently and in the interests of those who elected them. Over the past nine years the Government have progressively and deliberately deprived elected authorities of their powers and have vested those powers in Secretaries of State and civil servants. Since the Conservatives came to power in 1979 there have been 46 local government Acts of Parliament and 12 major changes in local government finance. The Government have undermined the confidence of members of local authorities of all political persuasions who have worked so hard for the good of their communities. Local authorities, the Churches, the CBI, trade unions and other organisations are opposed to present government policy.
In creating quangos to replace local government the Government have packed their boards with political sympathisers. A comparison of the membership of 22 quasi-autonomous non-government organisations in 1979 with their membership today shows that two-thirds of the chairmen had connections with the Conservative Party, nine were active members of the party, four were directors of companies which subscribed to the Tory Party. Since 1979 fewer members have been drawn from local government and community organisations than ever before. More and more businessmen are taking their places. Women are under-represented. There is a greater chance of being invited by this Government to sit 698 on a public body if one has been to Eton or Harrow, than if one is a member of a trade union or a social organisation.
By the creation of boards for transport, health, police, docklands and a range of other services, the powers of local government are being further diminished. Those boards meet for the most part behind closed doors, well protected from criticism by a buffer of public relations officers. They are not accountable to the public that they endeavour to serve.
I did the groundwork for my work in national politics as a member of a local council for many years. As a councillor, one is in daily contact with the electorate and the administration, working closely with local government officers. The weakening of local government is a threat to democracy itself and the Government stand condemned for their policy.
§ 3.45 p.m.
§ Lord Jenkin of Roding
My Lords, while I am grateful to the noble Lord, Lord Bottomley, for his half-kindly reference to me, I can reciprocate by saying that in our part of London he and his very distinguished wife have played a most notable part in local life, she particularly in the health service. That is remembered widely by many of the older of my former constituents.
The noble Lord, Lord McIntosh, started with a proposition with which everyone would agree, namely that all governments have made use of quangos. It is a perfectly acceptable means of making arrangements for public service. However, when he started talking about the multiplication of quangos he left me behind. There has never beer aquango-making period remotely to compare with the period of the first post-war Labour Government who transferred huge swathes of private industry, co-operatives, local authorities, charities and many others into the hands of government-appointed nominees. What is more, every successive Labour Government have sought to repeat that process. One has only to look at the last Labour Government of 1974 to 1979 to see that further swathes of the economy were brought under the control of government-appointed quangos—the aircraft industry, the shipbuilding industry, computer companies and many others.
That process has been most decisively reversed in the past nine years, to the huge benefit of the public, of the economy, and, moreover, of the employees in those industries. It has always remained a complete mystery to me why week after week in both Houses of Parliament Labour politicians complain about the conditions of employment of those in the public sector and in the next breath demand that there should be many more of them by bringing industries back into the public sector.
Now I turn to the bodies with which this debate is particularly concerned. My noble friend Lord Bellwin has given the figures and I shall not repeat them except to make one point. I was responsible for the creation of 193 district health authorities in the place of 90 area health authorities. That was a 699 process of devolution to the more local level, which I have to say—and the noble Lord, Lord Ennals, is nodding in agreement—was widely welcomed in all parts of the country. That comprised much the largest part of the small increase which went some way to offset the major reduction in quangos. There has been a net cull of over 500 quangos since 1979. The message is clear. If one is looking for quango breeding, go for the Labour Party; if one wants to reduce them, vote Conservative.
§ Lord Ennals
My Lords, will the noble Lord allow me to intervene? I am most grateful. One of the reasons why I nodded in agreement with him was that he had to take that action in order to put right the tremendous increase in quangos created by his predecessor as Secretary of State, the noble Lord, Lord Joseph.
§ Lord Jenkin of Roding
My Lords, I am grateful to have the noble Lord's support for what I said. I believe that mere numbers are not necessarily the most important point if one obtains further dispersal of power away from the centre.
I should like to refer to some of the points made by the noble Lord, Lord McIntosh, and draw on my experiences at the Department of the Environment. Let us look first at the rules regarding the making of public appointments of which the noble Lord had some criticism to make. I worked to what was called Issue 3 of the Civil Service Department Guide on Public Appointments Procedures, dated April 1984. On looking through that, one sees that the details are spelt out in two letters dated in 1976—one from Sir Kenneth Stowe, the Labour Prime Minister's private secretary, and the other from the Head of the Civil Service, Sir Douglas Allen, now the noble Lord, Lord Croham. They spelt out the procedures. which were exactly the same under the Conservative Government as under the Labour Government. There had been no change in form or substance from the rules operated by the government of whom I was a member.
The noble Lord, Lord McIntosh, says that surely No. 10 has had a great influence on public appointments. Those procedures spell out the precise order of events before one can approach someone about a public appointment. One of the essential steps is that before one can even speak to someone—it was the same in 1976 as it was when I was in office—one has to put one's proposal to No. 10 and have it accepted.
The Public Appointments Unit—the PAU—maintains a central list of between 5,000 and 6,000 names of people from all walks of life. Although it is aimed primarily at providing candidates for more senior appointments, it is no longer right to refer to it as simply a list of "the great and the good". It is the source of information for a wide range of appointments, including major regional and departmental committee appointments. The central list contains the names of people from a wide range of disciplines, professions and occupations, as well as the names of generalists.
The list also contains the names of people in what are sometimes referred to as special demand groups. 700 The noble Lord, Lord McIntosh, referred to women. There has been a great increase in the number of women appointed to public bodies in recent years, not least because there are now many more women on the central list. There are also younger people, members of minority groups and others who it is felt should be considered for appointments. There is also a list of retired civil servants.
The noble Lord referred to political nominations. Many people think that there is a separate list of political nominations. It is right that the political affiliations of those people on the central list should be noted, but there are no formal arrangements—there were certainly none when I was in office—operated by the Civil Service for receiving a flow of nominations from any political party, national or local.
§ Lord Dean of Beswick
My Lords, the lessons of experience contradict the noble Lord's comments. When people like myself raise questions about political affiliations being known with regard to appointments to district and regional health boards, we are told that such affiliations are not listed. Who is right?
§ Lord Jenkin of Roding
My Lords, I am reporting the procedure that operated when I was a part of it.
Thus, when an appointment is to be made, it is officials—civil servants—who consult the PAU. They add some names from their own lists. They then consult the Prime Minister and, with the Prime Minister's consent, approach the first choice. It is a set procedure operated by the Civil Service in all departments on behalf of their Ministers. If it had been subverted to the extent that the noble Lord, Lord McIntosh, has sought to suggest, he in fact makes a serious accusation about the political impartiality of the Civil Service.
When I made appointments, I tried to achieve a balance. In some cases, I succeeded. I quote as one example the appointments to the Widdicombe Committee. Although it was well known that that committee was set up to look at abuses within local government which had been widely commented on, the committee was chaired by someone who had been a Labour parliamentary candidate. The committee members included a distinguished local government official, one capable businessman, a very distinguished public servant who was certainly not of Conservative persuasion and a lady with wide experience of local and public affairs; only the last name had any Conservative affiliations and those were pretty tenuous. It was an excellent committee. I consulted all the local government bodies and all the political parties; they all eventually agreed to co-operate despite the fact that the intention of the Widdicombe Committee was clear. In this Session we shall debate some of the recommendations that flowed from that report.
My noble friend Lord Bellwin referred to urban development corporations. I do not wish to repeat what he said. It was always our practice to consult local authorities informally, but I have to say that during my time most of them refused to have anything whatever to do with the corporations and 701 declined to nominate people. They imposed conditions that they knew perfectly well the Government could not possibly accept. We always invited local councillors to serve,as persons having special knowledge of the locality".To their eternal credit, three distinguished council leaders in London—Paul Beasley of Tower Hamlets, Jack Hart of Newham and John O'Grady of Southwark—agreed to serve, despite the total hostility of their own local authorities. When their terms of office expired, we were unable to recruit anyone from the councils to replace them, except more recently in Tower Hamlets where political control has changed. It has now accepted a place on the LDDC. Newham and Southwark still refuse to do so.
I have tried again and again to persuade a representative of Liverpool City Council to serve on the Merseyside Development Corporation, but the council has refused. It does not lie well in the mouth of the noble Lord, Lord McIntosh, to say that there has not been proper consideration regarding the appointment of Labour nominees. They were asked again and again, and again and again they refused to serve. Happily, wiser counsels now prevail in Liverpool and a council representative now sits on the Merseyside Development Corporation.
Bristol is an even more absurd example. The Government invited two city councillors and a councillor from Avon Council to sit on the Bristol Urban Development Corporation. On consultation, the city council took an official line of non-co-operation and the county council voted down acceptance of a place. Happily, its members were wiser and the individuals approached chose to outface their colleagues and serve rather than boycott the corporation.
We had problems with the appointment of a deputy chairman for London Docklands to replace the noble Lord, Lord Mellish, (to whom I mentioned the matter) at the end of his distinguished period of office. We looked at a range of possible successors because we always took the view that it was wise to have a Labour deputy chairman to balance a businessman chairman. We considered the noble Lord, Lord Northfield. The noble Lord, Lord Graham of Edmonton, was approached, but he very properly made the point that he would have had to give up some of his Front Bench appointments and was therefore unable to accept. We eventually appointed John Mills, a Labour councillor from Camden. When he had to be replaced last November, the noble Lord, Lord Cocks, took his place. Perhaps I might tell the noble Lord, Lord McIntosh, that his name was on the list but he was not approached because it was felt that he would not have accepted in view of his Front Bench responsibilities.
The idea that we have not appointed Labour people is absurd. If one looks at other authorities—water authorities, development councils and so on—one sees that that is not true. I totally reject the main accusations made by the noble Lord, Lord McIntosh. I believe that the Government's record in handling appointments to those bodies has been of 702 a very high order and has not had the political bias to which he referred. I believe that he grossly overstated the case and has left out of account entirely the efforts made by myself and others to try to obtain nominees from other parties only to find that they refuse to serve. I think that this Motion is a lot of nonsense and I hope that the House will treat it as such. It may be a point of some interest to the Labour Party to debate the findings of the Labour Research Unit, but I do not believe that they have much purpose or relevance to reality.
§ 3.59 p.m.
§ Lord Graham of Edmonton
My Lords, the noble Lord, Lord McIntosh, introduced a word which is not easily used either in this Chamber or in another place; namely "patronage". We should not baulk the issue. We are politicians. One of the arts of being a good politician is the manner in which one uses the patronage and privilege that one has. I believe therefore that it is perfectly proper arid sensible for this House to spend a short time in 1989 reviewing the history of patronage used primarily by central government over the past few years.
The noble Lord, Lord Bellwin, spoke from his long experience. He was able to persuade me of the attempts that he has made to achieve an appropriate balance. That does not always mean an exact balance. The noble Lord, Lord Jenkin, was kind enough to indicate to me that he was going to refer to the situation five years ago when certainly did not object to being approached. However, I indicated to him then, as I indicate to the House now, that I was sent here, not in order to obtain perhaps a post somewhere else, but to be a working Peer on behalf of the Labour Party, and I was not prepared to accept his offer although I told him that I appreciated his thought at the time.
We are considering situations that are light years away from the reality of 1989. We are looking at the situation from a period that I would categorise as bipartisan when attempting to make sure that major public bodies have some semblance or balance. The noble Lord, Lord McIntosh, makes a charge that I believe is well founded. It is that patronage and privilege is being used excessively for party political ends in 1989, far beyond what those of us who have served in public life for 20 or 30 years—or, as my noble friend, Lord Bottomley said, perhaps 50 years or longer—have experienced. The situation has radically changed. We are inviting the House to say that it is not good for public life and it is certainly not good for local government.
When one wants to know about the quality of life as a public representative on a council one does not listen to what I say from my experience but one goes to the councillors in one's community, whether they are Labour or Conservative. In 1989 am still able to keep up my contacts with the local councillors of both political persuasions in Enfield.. It is not a question of nostalgia, or of saying, 'Things ain't what they used to be." It is a question of considering the quality of life as a councillor in 1989. That quality of life has been made far worse not only because of the problems but because of the attitude of this Government and above all else of the Prime 703 Minister. Reference has been made to the urban district councils, in particular London. The anti-democratic nexus was the crux of the argument in 1979, 1980 and 1981. I was heavily involved in the arguments on the planning and land legislation. I supported the view of my party and local people that the creation of the urban development corporation would not be the best way forward. I have to admit in 1989 that the record of the London Docklands Development Corporation is a very fine one indeed. Those people who have been associated with it are entitled to take most of the credit, although not all. With the passage of time, it means that councillors, not only in London but in many other places, are political realists. There was a period when consultation, and simply saying, "No", was perhaps the mode of the day. However, the councils have to work with the government of the day. They have to try to reconcile passionately held beliefs. What has happened in local government has borne that out over the period.
When one talks of the extent to which this Government have interfered and used patronage, one can talk in terms of personalities and appointments. The noble Lord, Lord Bellwin, decided to illustrate the extent to which trade unions and trade unionists were part of the picture some years ago. I may have written it down incorrectly, but I understand that 39 members of the TUC General Council were members of 180 quangos. I bet that the noble Lord could not find 39 members of the TUC General Council who are members of those quangos today—nor 29 or 9. Some might say that the trade union movement is marginalised and irrelevant, and that there are not as many high serving members of trade unions who are competent to serve on a range of bodies as were indicated by the noble Lord, Lord Bellwin. But if one is not prepared to give them a fair share—and I believe that the charge we are making is that they are not getting a fair share—then I believe that the noble Lord, Lord Bellwin, should be as worried as I am.
§ Lord Bellwin
My Lords, will the noble Lord be kind enough to equate his question on the representation of trade union people with the representation of Conservatives during the same period of time?
§ Lord Graham of Edmonton
My Lords, it is interesting that the noble Lord says that to be a trade unionist ipso facto is not to be a Conservative. I do not argue that there is not an imbalance. The point is that 39 out of 180 is a gross distortion of a fair proportion. I am saying that not only were trade unionists represented, but, as the noble Lord, Lord Jenkin, indicated when speaking of earlier days, the Co-operative movement was inordinately well represented.
I shall give way to the noble Baroness, Lady Blatch, although she has some 12 minutes of her own later. I also give her some of my time in order to keep the balance. The trade union movement and the Co-operative movement have men and women who are able to serve in public life. But they are being denied that opportunity not because they do not have the able men and women but for party, if not political purposes.
§ Baroness Blatch
My Lords, I thank the noble Lord for giving me a few seconds of his precious time. Has he taken into account the TUC's decision not to become involved in the Government's training schemes? It was invited to do so but chose not to become involved.
§ Lord Graham of Edmonton
My Lords, a body as powerful and influential as the TUC is entitled to consider how best it can demonstrate just how much it dislikes government legislation. If it decides not to be represented, that is its decision.
However, we are talking about a trend—a mood. We are discussing what has happened in public life over the past few years. I make the charge that this Government, and, above all, the Prime Minister, are responsible for changing ordinary people's willingness to serve in public life.
Among many other sensible words, the noble Lord, Lord Bellwin, introduced the words "accountable" and "accountability". He says that people are just as accountable now. I do not believe it. I believe that there are fewer people willing to serve in public life now than ever before. When people today consider what is in it for them—and I do not refer to money —in terms of satisfaction, being able to influence events and taking decisions on behalf of local communities in comparison with the past they feel that there is nothing in it for them. Many of them are wretched, in particular those who have good memories of the position 10 or 15 years ago.
Let me tell noble Lords what is happening in Enfield today. We now have a proposal being brought forward before the council to put all council services out to tender—not just those that the Government are suggesting, but all of them. We want Enfield run as Enfield plc. We want two categories of director—executive directors who are the council officers and non-executive directors who are the councillors. Every 12 months we shall report to the shareholders, who are the people who live in Enfield. At the end of the day that may give a better and more efficient service, but what about the nexus of accountability? What about the nexus of community? And what about making life worth living for those people? We ought to listen carefully to what other people are saying.
I have here an article written in the Observer magazine a few weeks ago and I believe it sums it up.But the charge against Mrs Thatcher goes deeper than this. All governments may have made politically motivated appointments from time to time; only she, it seems, has systematically subverted the country's institutions, breaking their independence and bending them to her will. Political commentators have long theorised about her hostility to all 'intermediate institutions': local government, the trade unions, the broadcasting organisations, the universities, the Church. When she cannot abolish them altogether, the argument goes, she packs them with her placemen".I believe that that charge is well founded. When the GLC proved that it was not prepared to bend, it was abolished. When the Inner London Education Authority proved that it was not prepared to bend, it was abolished. When football proves that is has difficulty in managing its problems, a quango is to be created, the Football Membership Authority, which will be able to run football—except in the 705 small print we find that it has to have the endorsement of the Secretary of State. I believe the Government's attitude is summed up by what the Prime Minister said last week, "Bag it, bin it and then we will win it"
§ 4.12 p.m.
§ Lord Rippon of Hexham
My Lords, it has never, at least until recent times, been a principle of the Conservative Party that the gentleman in Whitehall really does know best. I was not wholly happy to hear my noble friend say that he operated in these matters under some department directive. I did not know about it in my time. Perhaps I should have, but I have always believed that, while it is perhaps nice for noble Lords opposite to have their names on the list of the great and good, there are great and good outside the list which is kept in Whitehall.
Of course a Conservative Government or a Conservative Minister may believe that power has been exercised wisely and fairly, but that is not a good or sufficient argument for increased central control. The trouble is that the nominated body looks towards those who nominated it and away from those elected to represent local interests and opinion.
Indeed I have now come to the conclusion that preventing central government, the executive, from wielding power almost to the exclusion of all rivals has become an urgent task. The process of centralisation for the sake of good government, central as well as local, should be halted and halted now. My reminiscences cannot go back as far as those of the noble Lord, Lord Bottomley, but when I went into local government in 1945 on my council, there was the Accountant General of the Ministry of Pensions and another high ranking civil servant, a director of a large public company, a senior partner of a firm of London solicitors, and the secretary general of the Municipal and General Workers Union. I can remember when in 1949 at the conference in Torquay of the Association of Municipal Corporations the late Mr. Walter Elliott, himself a great Minister in charge of local government at one time, warned about the growth of nominated bodies. He cited the example of the Roman and the Chinese Empires, which eventually both collapsed under the weight of centralised bureaucracy which could no longer recruit at the periphery.
Local councillors directly elected play a vital role in the maintenance of a free and responsible society, because they are the representatives of local public opinion. They are responsive to local needs and wishes and they are, I emphasise, an essential counterbalance to the immense and growing power of central government. When a Conservative Party is in opposition it understands that. I wish we could recognise that the purpose of local elections is not to recruit those who are acceptable to existing authority. Traditionally if there is a Conservative government the Socialists win the local elections. It is very hard on councillors that this should be so. The reserve position applies when there is a Labour government when we win the elections.
706 I entirely agree with those noble Lords who have said that the diminution of local democracy by the transference of great blocks of power to ministerial nominees is dangerous. Ministers are but shadows. They come and go, but these Whitehall mandarins remain with their directive telling Ministers whom they should or should not nominate. Not that I believe that every Minister takes that advice because if one looks at who is appointed there is a tendency for people to appoint those whom they think support them rather than those whom they think do not.
To come to more recent times, I was reminded in an article in the Financial Times on 7th February by Mr. John Humphries, the chairman of the Environmental Council, that when in 1973 I introduced the Water Bill and set up the existing water authorities, I then gave an assurance in the name of the Government that the local authorities would have an absolute majority on the water authorities' boards. It could then be argued that there was simply a change of form not of substance. The ratepayers who had bought all the infrastructure and paid for it were told that they would still have ultimate control over it, but in 1983 the Government quietly changed the rules of the game by removing most of the local authority members. They did not ask for this or that member of the council to go on to the boards: they were told that they must all leave. I deplored that action then and I deplore it now. In the process the Government effectively transferred the ownership and control of the assets which previously belonged to the ratepayers into their own hands. The effect, as Mr. Humphries says in his article, is that,the Government are selling something that they do not own and for which they have never paid".
§ Lord Rippon of Hexham
The compensation should go to the ratepayers, my Lords.. They should have their assets back. On 31st January, the Government in their Statement introducing their proposals for reform of the National Health Service announced that in future local authorities would lose their present rights to appoint direct their own members of health authorities. That moved me to ask the Minister who had made the Statement and who is replying to the debate today why the Government persistently regard democratically elected councillors as unrepresentative of local inerests and concerns. To that I received the reply that the object was to confine the numbers involved on boards to people who have a straightforward, technical contribution to make. On that basis I suggested that government might as well be run by Permanent Secretaries instead of Ministers. All this was being done, I was told, and I quote from the Statement:Authorities will need to be organised as more effective decision-making and managerial bodies."—[Official Report, 31/1/89; col. 1004.]But efficiency as the greatest social good has been the cry of despots throughout the ages. I am not particularly impressed by the record of Mussolini just because he made the trains run on time.
707 The doctrine that central executive power is exercised in the name of efficiency is not confined to any one political party. It can come from the Right or the Left. What concerns me is what elective dictatorship, of which my noble and learned friend Lord Hailsham of Saint Marylebone wrote, has come not from the Left but from the Right. Labour Governments have nothing to boast about in that regard. My noble friends have already referred to their not wholly satisfactory record. Change the government and you change the tune. I am concerned that over many years covering successive governments the status of the elected member has been seriously eroded by the growth of public bodies whose members are nominated by a higher authority or by the Minister.
I do not believe that the charge is answered by the Government saying that they have abolished a number of quangos. Some are purely governmental bodies. I regret the departure of several, such as a small committee of mine responsible for bird-watching in the Royal parks. It did not cost much money and as a statistic is not very impressive.
Nor do I believe, as one of my noble friends on the Front Bench recently said, that it is any good for the Government to say that they have given people more freedom to buy their own homes and to choose local education. It is not good enough to say, "You can have the freedoms that we choose to give you but not the freedoms we do not choose to give".
When a Labour Government was in office the Conservative Central Office produced a nice little document which is still worth reading. It is entitled Guidelines for good local government. It stated:Conservatives oppose the growing tendency to make all decisions in Whitehall. Labour, on the other hand, sides with Whitehall against town hall".Our cry in the Conservative Party used to be, "Town hall, not Whitehall". It was the party opposite which was then the prisoner of the central bureaucracy.
I also recall a draft election address issued by Conservative Central Office for use by local candidates. It denounced the taking of power out of the hands of local councils and giving it to people who had not been elected but hand-picked by the Minister. It proclaimed:This is a vicious system, not what should be expected from Socialists who are always talking about democracy".There is just one question I want to put to the Minister. Why is a system which is vicious when there is a Socialist Minister any less vicious when there is a Conservative Minister?
§ 4.22 p.m.
§ Lord Dean of Beswick
My Lords, I am grateful to be able to follow the noble Lord, Lord Rippon. Some years ago I was one of a delegation of junior councillors who on several occasions saw him when he was Secretary of State for the Environment. Although we differed politically we gained the impression that our comments were heeded. They may not have been acted upon but there was some sympathy towards them.
I am glad that the noble Lord referred to the appropriation of the water authorities. I recalled that 708 when I left Manchester as leader of the council the valuation of its water holdings was between £250 million and £300 million. That has been taken away without compensation. When the privatisation is complete and all the surrounding land has been flogged off to the private sector, not one penny will go back to the ratepayers of Manchester who helped to develop that. I declare an interest as a ratepayer in two areas in Greater Manchester. I have a property in Tameside and another in Manchester.
I was interested to hear the noble Lord, Lord Jenkin, refer to his democratisation of the health service. If he did what he said, then I applaud him. Can I expect that he will join us in our stand against the Government's new proposals which will remove every local authority representative from the new health authorities? I hope to see him stand and be counted on that issue, because that is the intention of the present Government.
I hope that noble Lords will forgive me if I localise my argument. Most of the debate has so far been related to urban development corporations. I am not against them; initially I was opposed to them. It is nonsense to say in the Chamber today that they were willingly accepted by the local authorities in whose areas they were planted. They were accepted reluctantly. Some of the cities on which they were imposed were in the process of huge developments freely entrered into with various bodies such as Phoenix Initiatives. However, the corporations exist and it is wise for local authorities to join in and make them work. That was the advice that I gave when asked.
I should like to turn my attention to the residuary bodies. The noble Lord, Lord Jenkin, was the Minister when the Local Government Act was passed which set them up. I dealt with the Bill with my noble friend Lord Graham. I have the impression that some of the residuary bodies are now involved in activities never dreamt of by the noble Lord, Lord Jenkin. I believe that that is probably because of a change of Secretary of State. We on these Benches have always said that one should not expect Secretaries of State to behave consistently. One may act in a completely different way from another.
I recall our discussions on the Local Government Bill, in particular the residuary bodies. We asked how they would be formed and what their powers would be. Subsequently a situation arose in the Greater Manchester area about which concern was expressed in the press. It was the development of the site of the old Central Station in Manchester, now known as G-Mex. I believe that the noble Lord, Lord Jenkin, knows about that. I was not the only person to be concerned about some of the rumours which were being circulated in the responsible press regarding the financial arrangements. The body had been set up by the previous Greater Manchester Labour Council. I believe that it got it wrong and made an appalling blunder at that time.
At the time I was concerned about what I read in the press and I sent a full briefing of my information to the Secretary of State, the right honourable Kenneth Baker. He was also concerned. Nothing was made public because I understood that if the matter was reported in the press commercial damage could 709 be caused. I met Mr. Baker and the noble Lord, Lord Skelmersdale, and the noble Lord, Lord Elton, who was then a Minister, to discuss the matter. I was concerned by the fact that rumours were being spread that the new chairman of the residuary body—whose name I did not know but I knew that an appointment with him had been made—had been placed on the board by the then chairman of the company who had been chief executive of the Greater Manchester Council.
I am convinced that I am right about what Mr. Baker said. He said, "No, I have placed the chairman of the residuary body on that company to safeguard the ratepayers' money". The ratepayers held 51 per cent. of the shares in that company but had no say in how it was to be operated. It was the first time I had heard the name when Mr. Baker said, "Do you know Peter Hadfield?"; I said, "I have never heard of Peter Hadfield". He said, "He is the new chairman and he will look after the interests of the ratepayers concerned".
Developments took place which resulted in my tabling a Question in your Lordships' House in the middle of last year. I discovered quite obliquely that the chairman of G-Mex had been removed from office by the chairman of the residuary body and he had taken his place. When I asked the Question in your Lordships' House the noble Earl, Lord Caithness, said that he had been removed because he had ceased to operate the company in the public interest. That was the official answer. Subsequently, the person involved has disappeared from the scene and the chairman of the residuary body is in charge.
But that is only part of the argument, because another company is involved which is known as Greater Manchester Property Trust Limited. The former GMC set up a complex web of companies to manage and control this site. These companies have never reflected the interests of the public sector nor the level of public financial support which was provided. The public sector had no power to nominate members or directors, to control remuneration levels or the finances of the company, or to monitor the affairs of the company. Elected members were specifically excluded by the constitution of one company to become directors.
There was, I believe, £20 million of funding put in to start this company off; and what activated my concern was a prediction of enormous debts accruing. I did not see why I and my family should have debts loaded on to us through the rates ad infinitum by the actions of the chairman of a residuary body or anybody else, taking control. Suffice it to say that it has taken over two years for the chairman of the residuary body and his chief executive officer, who, by the way, was the legal officer of the former Greater Manchester Council and who I would have thought had some say in drawing up the original legal concept, to set this company in being. But it has taken him over two years to sort it out and either he or somebody in his department, as the senior legal officer working for the Greater Manchester Corporation, must have been responsible for drawing up those contracts.
710 Turning now to the present situation, where obviously there is a dispute going on involving the City of Manchester, I do not want to get involved in the political arguments there although I do not see eye to eye with all that has been done. Nevertheless it is the elected body in Manchester; a short while ago it was trying to negotiate development as an adjunct to this particular site and was told by the residuary body "Hands off'. What the chairman has done in order to bolster his strength in connection with Greater Manchester Property Trust Ltd. is to appoint all the members of the residuary body as directors and also two of the leaders of other councils in the area (Labour-controlled) as directors in order to discipline the City of Manchester. I do not believe that the noble Lord, Lord Jenkin, when he brought the Bill through Parliament had any idea that such a situation was going to develop.
The point I want to put to the Minister is this. I understand that the papers are now there; an order has been laid, and is available, which is intended to wind up the Manchester residuary body. What happens to that company when it is wound up? The residuary body is set up only on a limited lifespan of five years—I think I have that right—and the period can be extended somewhat by the Secretary of State. Does it mean that in June, July or August of this year, if it is wound up, the chairman of the residuary body and all those directors he has appointed will cease to have any control? Will it then go to the people who are expected to provide the money to keep it going—that is, the ratepayers in the 10 districts of the former Greater Manchester metropolitan authority?
I have a specific interest because I am going to have to pay two lots of rates in Greater Manchester. In my opinion, my rates should be fixed by the local authority and there should not even be one infinitesimal part of that which should be fixed by the chairman of the residuary body. I n real terms that can happen—and incidentally today's debate will be only the forerunner of another debate. There is not the time to go further into this today, and I do not want to go over my allotted time because it is grossly unfair to do so. But I have to tell the Minister that I shall be coming back with more detail to this matter when the order is placed here to wind up the residuary body because there are a lot of questions that need to be answered. There are 2¾ million people living in the Greater Manchester area and I do not believe that residuary bodies were brought into being by the noble Lord, Lord Jenkin, to get involved in this type of activity.
I speak on a specific problem. I do not know what is happening with residuary bodies in other area, but I must tell the Minister that I shall be coming back to him on this matter at a later stage, depending on his answers.
§ 4.34 p.m.
§ Baroness Blatch
My Lords, I shall start by declaring an interest in that I was one of the people who appeared in an honours list in, I think, 1983 when I received the CBE and also later in 1987 when I was elevated to the peerage as a working Peeress, along with the noble Baroness, Lady Blackstone, and 711 the noble Lords, Lords, Lord Peston, Lord Johnston and Lord Trafford.
I hope the noble Lord, Lord McIntosh, will forgive me if I say to him that today he did not give us the usual impressive performance in the House which we are used to. I may be wrong but I suspect that he has been put up to this debate because he did not appear at any time go give the arguments observable commitment. Much of his case had more to do with the fact that he does not like the Government's policies: for example, the creation of CTCs, the opting out clause of the Education Act, the various housing initiatives, the abolition of the GLC and so on.
The Motion on the Order Paper today calls attention to the growth of non-elected bodies, yet in his opening statement the noble Lord said that his Motion had nothing to do with the growth of non-elected bodies. It is further concerned with the system of patronage, yet he talked much less of that then of his disquiet that too many Tories are being appointed.
As was pointed out by my noble friend Lord Jenkin, the system has not changed since the time of Labour Administrations in the 1970s. The number of non-elected bodies achieved its peak under the Wilson and Callaghan governments of the 1970s. In the closing years of the last Labour Administration we saw very rapid and considerable growth in the number of non-elected bodies. Coupled with an energetic nationalisation programme covering oil, shipbuilding and aerospace, patronage at that time by the Labour Government for their supporters was rampant. Executive action was increasingly the prerogative not of the government of the day but of the quango.
At the close of the last Labour Administration in 1979 plans in the pipeline included the creation of a national planning commission, a national transport planning authority, a communications council, a public broadcasting commission, a national youth body, a central advisory committee on education, an industrial democracy commission, four new broadcasting authorities and seven new advisory committees on the media. By 1979 there were more than 3,000 non-elected bodies to which Ministers had appointed more than 40,000 political placements.
In 1979, on coming into office Mrs. Thatcher and her Government set about the task of reducing the number of non-elected bodies. First, an audit of such bodies was put in hand under Sir Leo Pliatzky, a senior civil servant. When he reported (in Cmnd. 7797) in 1980, his findings confirmed the massive growth of non-elected bodies under the previous administrations. The main concerns of the Government at that time were that there were too many quangos, that they were too heavy a burden on the public purse and that there was very little accountability to Parliament. By 1982 the Conservative Government had achieved reductions of around 20 per cent., and that has since risen to between 25 and 30 per cent. That does not include the Government's privatisation programme.
712 As regards the patronage system used by many previous Labour Administrations, we need no lectures on this side of the House on that issue. As I have said, patronage by the Labour Government of their supporters was rampant and the figures I was going to use in this connection have already been used twice already during this debate.
I must declare a further interest in that for about three months I served on the European Economic and Social Committee in Brussels, and I can confirm that not all the appoiontments made by this Government were Conservatives. A further declaration of interest is that until recently I served as a local government representative on the board of Peterborough Development Corporation. Government appointments to that board by this Government have included Labour supporters and Conservatives, together with, I believe, one SDP member in the past. However, the board as a whole was predominantly apolitical. Indeed, if I were to make a comparison between the work of the development corporation and my own local authority, it would be that the development corporation got on with the job in hand in a completely apolitical manner, whereas in my local government authority the atmosphere is highly politically charged most of the time.
The area of non-elected bodies that I know best is development corporations. The new town development of Peterborough was achieved by successful co-operation between the corporation, a Labour-controlled city council and a Conservative —subsequently a hung—county council. The setting up of urban development corporations has proved equally successful—that has already been touched upon by my noble friend Lord Bellwin—by combining public and private sector finance with specific statutory powers to acquire land and buildings in order to secure the regeneration of run-down inner cities. Membership of these bodies reflects public and private sector interests and with few exceptions they have secured the co-operation of local government to achieve what is, or should be, a common objective—the regeneration of run-down areas. Where instances of poor co-operation have occured, it has almost invariably been due to Labour-controlled local authorities.
There is an argument that says that if local authorities were given money they would achieve the improvements for their areas. I am afraid that that is simply not so. Local authorities—I am a member of a local authority and I believe emphatically in local government—have many pressures on them. To presuppose that such concentrated expenditure over a defined period of time would take precedence over other needy programmes without serious interruption is wishful thinking. Development corporations with clearly defined objectives, using private and public sector funds and working co-operatively with local authorities of any or no political persuasion, are a recipe for getting the job done.
The Government have done more than any government before them not only to stem the growth of quangos but to reduce the overall number and their consequential costs on the taxpayer. More significanly, they have made such bodies 713 accountable to Parliament. In 1979 the Government included in the terms of reference of departmental Select Committees the function of scrutinising the work of government departments and associated official bodies. In 1981 Ministers were made responsible to Parliament for the effectiveness, efficiency and financial control of associated departmental quangos, thereby allowing questions to be asked openly on the Floor of the House.
The Motion is strongly drafted and the wrong arguments have been used to support it. The concerns of the noble Lord, Lord McIntosh of Haringey, and his colleagues about the growth of non-elected bodies, the patronage system and the effects on local government are entirely misplaced.
§ 4.42 p.m.
§ Lord Hooson
My Lords, there are three propositions in the Motion. Before I address myself to them I should like to make a few general observations on the debate.
I particularly agreed with what the noble Lord, Lord Rippon of Hexham, said. I am sure that the right approach to the Motion is not a statistical one; it is what is happening to the country. The noble Lord referred to one of my pet hobbyhorses, that is, the lecture some years ago by the noble and learned Lord, Lord Hailsham of Saint Marylebone, on the elective dictatorship and his subsequent book The Dilemma of Democracy. In that book he envisaged absolutely accurately that within the country, if anybody cared to use the powers and did not have those inbuilt restraints that mercifully most leaders of any party have always had, there is the power to exercise complete dictatorship, subject to election every four or five years as the matter comes up. I entirely agree with the noble Lord, Lord Rippon, that one of the greatest countervailing influences would be the restoration of pride, responsibility and freedom and certainly a much greater degree of liberty to local authorities. We are now in great danger of making the job of local authorities so unattractive that the calibre of the people who serve on them will gradually go down overall although there may be gifted individuals who for a variety of reasons go in. The more the general standard of local authorities declines in the country the more power central Government will seek to take into their own hands. I think this is a very bad development.
If I may turn to the three propositions, the first is the growth of non-elected bodies. Statistically I do not think that this is made out at all. It has been an unhappy growth in many ways, but an inevitable one in certain circumstances. It was one of the matters to which the noble and learned Lord, Lord Hailsham, pointed as giving Government the power, if they sought to use it, by using patronage to control government of the country more and more without any countervailing influences coming in.
Surely one should not have non-elected bodies unless the circumstances are such that one has to have them. Let us take the governors of the BBC. It seems fairly obvious that they should be non-elected. 714 They should be selected so that they are representative of the country as a whole and capable of exercising independent judgment, whatever their political affiliations.
One regrettable fact of life in recent times is that even this august body is more and more suspect because it is thought that the Prime Minister cannot bear to put on it people who are not, in the famous words, "one of us". That is a very sad reflection.
§ Lord Jenkin of Roding
My Lords, as the noble Lord has listened to a number of speeches of my noble friend Lord Rippon of Hexham, he might have thought that my right honourable friend the Prime Minister in fact exercised a very broad patronage in this regard.
§ Lord Hooson
My Lords, I shall come to the reason why I express it in this way. The point I made is that in regard to certain bodies—the urban development corporations, for example, and the rural development corporation in my own part of the country, which is now described under some other name—when there was a specific problem, one needed to direct funds with no competition for those funds to achieve a given end. It is right to say, for instance, that when the Labour government originally set up the rural development corporation in my part of the country—it is, after all, a very liberal part of the country—it had an extremely balanced board. There was an ex-Member of another place, Mr. Emrys Roberts, a one time director of Calico printers and an experienced businessman and chairman. The noble Lord, Lord Jenkin of Roding, referred to the fact that he had a system—run by his civil servants apparently—of appointing people to non-elected bodies. I do not doubt that Ministers of all denominations or parties have shown in the past that they were capable of achieving a balance. I accept therefore that there are non-elected bodies that are essential to achieve certain given ends with modern government. Great care must be taken to make sure that there is a balance when they are appointed.
I come to the second proposition: the patronage system used by central Government for their selection. I move in a number of circles. I move obviously in a political circle; I move in a legal circle and I move in a farming circle. I am a non-executive director of a large business and I move in business. I move in a Welsh circle. In the last two or three years I know from general conversation that there has been a feeling that the Government and the Prime Minister in particular are overdoing it.
It is not that bodies have become politicised, because to a degree they always were, but they have become over-politicised. Every sensible person in this country knows that that is true. In the past two or three years in particular we have seen the over-politicisation of these bodies and it is creating a number of problems for the future of this country. We can reduce representation through patronage. After all, I am in the legal profession which is a prime example of where patronage is very important to certain levels of careers if certain ambitions are to be fulfilled, and so on. It can have a devastating effect on people. Their independence oozes out of 715 them. Often their independent judgment oozes out of them, too, in the hope of attracting patronage by not being too critical. That can have a devastating general effect on the country. I believe that whereas the first proposition in the Motion is certainly not made out, the implication of the second proposition—that there is a certain injudicious and, indeed, misuse of patronage—is by and large made out.
I come to the third part of the Motion and the effect of such bodies on local government. It is obvious that if you use non-elected bodies to undermine the power of elected bodies you will undermine the morale and the influence of the elected bodies. However, much more than the use of non-elected bodies is the Government's centralising tendency that is undermining local government. I entirely agree with the noble Lord, Lord Rippon, in his analysis of what has been happening in the country. Oddly enough, it was open to any Prime Minister since the war, and before the war as far as I know, to develop the elective dictatorship. The noble and learned Lord, Lord Hailsham, was moved into print on this matter by the fear of a Left-wing government and an extremely clever Prime Minister gradually taking all the power controls, so to speak, into his or her own hands and exercising them so that the government was indistinguishable from a dictatorship, though an elective one which would have to be re-elected every four or five years.
The truth is that we are seeing this tendency writ large today and I am not surprised that a traditional Conservative like the noble Lord, Lord Rippon, expressed himself in the way that he did today. It is in the interests of our country that we have countervailing influences to this centralising trend that is now becoming totally unacceptable throughout the country.
§ 4.52 p.m
§ Lord Ennals
My Lords, I am most grateful to all who have taken part in this debate. In one way it has perhaps been a more lively debate than we might have expected because the best part was the exchange between the noble Lords, Lord Rippon of Hexham and Lord Jenkin of Roding. If we had had only that three minute exchange it would have been a rich debate. However, that is not to undervalue the points made by my noble friend Lord McIntosh of Haringey, let alone my noble friends Lord Bottomley and Lord Dean of Beswick who have set out the case against what has happened in the past few years. I would not necessarily say that it has occurred throughout all this Government's 10 years, but it has done so to an increasing extent as the Government have seemed, as the noble Lord, Lord Hooson, said, to want to centralise power at a time when, in my view, it is so unhealthy.
We have seen that in a number of respects. I think that the undermining of local government is the most important one. This is not a party political issue because, in spite of the speech made by the noble Baroness, Lady Blatch, with an excellent brief, it is clear that the Government wish to undermine the powers and authority of local government. That is resented as much by Conservatives in local 716 government as it is by Labour and the other parties. This is not a party political issue; it is a fact that simply cannot be denied.
I suppose the main reason why this House is still waiting for a response to the Griffiths Report on community care is because Sir Roy Griffiths, in the mind of the Prime Minister, made the great mistake of suggesting that more authority should be given to elected local authorities, who should be the lead authorities. Therefore, we have gone for more than a year without having an answer because the Government cannot decide how to go against the validity of the argument put forward by Sir Roy Griffiths and yet they do not feel that they can go along with that argument.
We have seen—it has been mentioned bya number of noble Lords—that the quality of people coming into local government has been affected. That is what disturbs me most. Much is now done and said to discourage young and able people from joining local government because, in a sense, they are being undermined. The same applies to the trade union movement. If you marginalise people, if you reduce the extent to which they are consulted and they are brought on to non-elected committees, you push people into a position of being either defensive or—by way of showing their feelings—aggressive. It does no good to our national life to undermine local democracy or the relationship that exists between the trade union movement and society in general.
The same applies for the professions. It would appear that from time to time the Prime Minister picks on a new group of people to be attacked and isolated. The professions include doctors and nurses in the health service, and I shall come to the health service in a moment. The latest victim is the Bar which is under attack from the Prime Minister. The effect is felt not only by the professions but within the universities that produce the members of the professions. It is divisive in our national life and it is very unhealthy.
In general terms, the assumption that all quangoes are wrong or unnecessary is incorrect. There are many good examples—the BBC was mentioned and the Countryside Commission is another—where clearly there is work to be done by people with commitment, dedication, knowledge and skill who do not necessarily need to be elected.
In most of the time at my disposal I want to refer to the National Health Service and the proposals made by the Government which, in my view, go a long way to reduce even that degree of responsibility which exists at present; and there is not much of that. The Government plan to remove any element of democracy in the National Health Service. In my experience of over 42 years, the National Health Service has gained enormously not just from the active participation of elected members of local authorities serving on health authorities but from the lay participation of a wide range of people, including many in this House, who have played a role on health authorities. My fear is that it will all go, and that all the emphasis and power will lie with managers and administrators often receiving inflated salaries and earning much more, it would seem, than many people now working in the health service.
717 There is a degree of patronage right now, of course, but I do not intend to go into the details of that. What have the Government proposed? First, they have proposed opted-out hospitals—or self-governing hospitals, if the Government prefer that description—freed from the scrutiny of health authorities and of local authorities. Who will have the power in these new authorities? The chair will be appointed by the Secretary of State for Health and the rest of the board either appointed by the Secretary of State or by the region which is itself appointed by the Secretary of State. All power lies with the Secretary of State. Freedom to choose will be denied to patients. The administrators will direct patients to hospitals where the administrators, not the doctors, will have negotiated the cheapest possible contracts.
The second proposal is for practice budgets for GPs. That will deny doctors the clinical freedom that they have always had. But that will provide no way in which they are to be supervised by any elected authority, or themselves to elect representatives to any other authority.
The third proposal is to reorganise the family practitioner committees. They will be cut down to size. Who will appoint the chairman? The Secretary of State is appointed to appoint the chairman. In the case of the other 10 it will be the regional health authorities who, as I have said, are appointed by the Secretary of State. There is written into this proposal all power to go centrally to the Secretary of State. The fourth proposal is that the Secretary of State proposes to sack all the elected members of the health authorities. Apparently some will be replaced by non-elected businessmen. That proposal is justified on the ground that it will free local decision-making from being influenced by political prejudice or lobbied by special interest groups. I find that very disturbing.
In the field of the health service that I am discussing at the moment, it is vitally important that health authorities should be responsible to local community groups. Sometimes they may act as pressure groups. The idea that we should try to isolate those who have authority from the pressure of normal public opinion goes against any principle of democracy that I know. I believe that this centralisation and concentration of all power at the centre is patronage at its worst. It should be stopped before it goes any further.
I wish to raise another point that worries me very much. I am concerned about the whole system of decision-making at the present time. Perhaps I may put the NHS proposals in a wider perspective. The case I want to make principally against the Prime Minister but also those Ministers who act in the same way, is that the normal decision-making process seems to be in the course of change. As a Minister in four government departments for over 10 years I know that there has been a long and honoured tradition applied by both parties, until Mrs. Thatcher took over, that the Government should seek to rule by consent. To achieve that consent you need wide consultation with the 718 professions and within the Civil Service. Obviously an independent Civil Service is available to provide guidance to Ministers. But I hear that increasingly Ministers take decisions without reference to their civil servants and that the civil servants are put in the position of complying and not being consulted. There is no sense of partnership that has always seemed to be so important as regards the relationship between Ministers and civil servants. Now there appears to be a great degree of alienation; namely, "Don't argue, do as your are told".
I believe that is very disturbing. Similarly, the NHS proposals were brought forward without any consultation whatever with the professionals, be they doctors, nurses or the professions supplementary to medicine. I find this a very disturbing situation. Ideas are served up by what I call rather crackpot institutions such as the Adam Smith Institute and the Centre for Policy Studies. Those ideas appear eventually either amended by Ministers or as they were presented. It means that there is no serious discussion by those people who have to carry out the proposals that have been put forward. The mood of those who work in the health service has not been improved by some of the insults that have been thrown by Ministers at the professionals who work in the National Health Service.
I feel that we are not only facing a challenge to local authorities and their independence and their ability to respond to the wishes of those who elect them at local level, but we are seeing the arrogance of power that is creating divisions within our society that I believe are very dangerous indeed. The conflict that is now being promoted between the Government and the professionals is a very dangerous one. It was quite right that reference should be made by two noble Lords to the writings of the noble and learned Lord, Lord Hailsham, who spoke of the elective dictatorship. I believe that the most telling point that was made by the noble Lord, Lord Rippon of Hexham, was when he said with great emphasis that it is a strange situation in which this picture, as seen by the noble and learned Lord, Lord Hailsham, should come about from the Right and not from the Left.
Increasingly and every day that goes by I am happy to think that the remaining time that this Government have in power will be limited. But I hope that they will not do so much damage to relations with sections of our society like local government, the trade unions, the professions and society in general, that it will be difficult to recreate any sense of unity within it.
§ 5.5 p.m.
§ Lord Hesketh
My Lords, in responding to this Motion I, like many other noble Lords, was very grateful to the noble Lord, Lord McIntosh, for pointing out to a certain extent the irony of debating this particular Motion within your Lordships' House. I can assure the noble Lord that I am in the difficult position of benefiting neither from patronage nor from the battlefield. I suppose I fall somewhere in between.
719 Perhaps I may make it clear that government policy since 1979 has been to control the growth of non-departmental public bodies. By non-departmental public bodies I mean bodies that have a role in the processes of national government but are not government departments. The key factors of such bodies are that Ministers appoint all or most of the members and have the power to establish the body and to wind it up. The Prime Minister restated government policy on 28th January 1988, saying that for some particular tasks, non-departmental public bodies can be the most appropriate and cost-effective solution but that the Government will continue to resist proposals for new bodies unless this can be clearly demonstrated within a strict framework of financial and management control.
There were 1,648 non-departmental public bodies in existence on 1st April 1988. This represented a net increase of five over the previous year, but a net reduction of 519 or 24 per cent. since 1979. Your Lordships will see therefore that this Motion is based on a misconception concerning the growth of such bodies. The fact is that there has been a major decrease in their number since 1979.
I believe I am right in saying that both the noble Lord, Lord McIntosh, and my noble friend Lord Rippon of Hexham, suggested that the bodies that we have set up are much weightier than the ones that we have abolished. My noble friend Lord Rippon pointed out his bird fanciers in St. James's Park.
§ Lord Hesketh
My Lords, I do apologise. One can easily swap examples. In addition to the number of significant individual bodies, I can point to major reductions in the number of new town development corporations and as a result of the transfer of responsibility for industrial training bodies, to the industries which have the main interest in their activities. Moreover, a major result of the government's privatisation programme has been that some of the country's largest industries and corporations have returned to the private sector.
I scarcely need to stress in this place that Parliament is the supreme institution in our affairs. The elected national government brings proposals for new bodies or adjustments of functions between central and local government and elected and appointed bodies to Parliament on the basis of their manifesto. Much as we respect and value local government we cannot accept the doctrine that local government has an alternative mandate to central government. I should perhaps remind your Lordships that local government in Britain spends 25 per cent. of public expenditure, 10 per cent. of gross national product and has over 2.5 million employees; a number, interestingly, that is scarcely different from the figure that existed in 1979. So that those who suggest that local government is about to expire or has been appallingly savaged by our policies, are rather wide of the mark.
As noble Lords will know, the Government believe it is essential that we have an efficient and accountable system of local government in this country. 720 That is not to say however that local government is always the appropriate organisation for carrying out statutory functions; indeed for many it would be the wrong option. What one has to do is to look at each situation on its merits and entrust the function to the body best suited for the purpose. The point is demonstrated if one looks at a selection of the bodies created by Parliament within the past few years.
Seven residuary bodies were appointed on the demise of the GLC and the metropolitan county councils. Abolition of those authorities meant a range of decisions needed to be taken quickly, on debt management, superannuation, legal liabilities and the disposal of surplus property. It would be naive to suggest that in London, for example, the 33 London boroughs would have been able to reach unanimous agreement on these issues. What was clearly required was a single administrative body which could take an independent view on the action necessary to wind up the affairs of the abolished authorities. This is what the Government did. Similar bodies were set up in the metropolitan areas and they have worked well.
In the metropolitan areas other than London, the districts were sometimes able to agree on a lead district to take responsibility on their behalf for functions like debt or superannuation. This is a tribute to the working relationship between residuary bodies and districts and their mutual wish to do a good job.
The success of the Government's strategy in establishing the residuary bodies speaks for itself. More than £420 million of capital receipts from the sale of surplus property will have been distributed to successor authorities by the end of this financial year, with more to come. It has been an enormous task to identify and shake out the thousands of surplus properties which had been mothballed for many years by authorities which sometimes did not even know what they owned. We also estimate that more than £280 million in reserve balances will also have been distributed. This could not have been accomplished but for the very nature of the residuary body transitional organisations. These were set up with a single objective; efficiently to wind up the affairs of the abolished authorities and then wind themselves up within the shortest possible period, leaving the London boroughs and metropolitan districts with the benefits.
One residuary body—Tyne and Wear—wound up last Autumn, and South Yorkshire should go in the next few months. All are on timetable for completion of the purposes for which they were established, and, in the main, with the full co-operation of the local authorities in their areas.
I should like to turn to the Audit Commission, as I think it is a good example of the successes so-called "non-elected bodies" can achieve. Even the noble Lord, Lord McIntosh, had a few kind words to say about the Audit Commission. The Audit Commission was established in 1982, really for three reasons. First, we wanted to create an independent body responsible for local government audit with powers and duties laid on it by Parliament. Secondly, we wished to end the practice whereby local authorities could appoint their own auditors so that 721 there could be no question of the auditor's independence. Thirdly, the Government saw a need to strengthen and widen the audit function, particularly so as to bring in a proper concern for value for money.
The Audit Commission has, in our view, been a resounding success. It has achieved an improvement in the standards of local government audit through greater involvement of the private sector, through clear guidance and good management of the audit function, and through effective quality control. At the same time the district audit service has been invigorated both by competition from outside and by the commission's management training and monitoring of standards.
It is probably in the area of securing value for money, however, that the commission has made its most distinctive impact on local government. The commission's auditors had, by the end of March 1988, identified potential value improvements at individual local authorities worth some £750 million per year of which £220 million per annum has been fulfilled. These resources would have been sufficient to fund, say, up to 30,000 additional sheltered housing places in a financial year. The Audit Commission is, I accept, a non-elected body. It shows, however, just what can be achieved by such expertise.
Perhaps I may also say a few words about urban development corporations, which were drawn to our attention by several noble Lords, in particular by my noble friend Lord Bellwin and the noble Baroness, Lady Blatch. They are single-minded organisations with a statutory duty to secure the regeneration of their run-down inner city areas. They combine statutory powers and public funding with the private sector experience of their boards and are therefore effective agencies for urban renewal.
It may be said that functions should have been given to local authorities instead. However, local authorities have wide remits and are not designed specifically to tackle urban regeneration, as my noble friend Lord Bellwin pointed out. Other priorities may take precedence over urban renewal. An urban development corporation on the other hand is able to concentrate exclusively from the very start on the task of regeneration in a way that a local authority could not. We see the work of urban development corporations as complementing the work of local authorities. The corporations are encouraged to co-operate with local authorities, and I am pleased to say that relations with local authorities are generally good. Notable improvements have been achieved in co-operation with previously unhelpful authorities. For example, in the London Docklands, housing scheme arrangements have been agreed with local boroughs, including the refurbishment and provision of new sites.
I entirely agree with the remarks of my noble friend Lord Jenkin about the improvement in the relationship of Liverpool city council and its agreement to consultations with the Merseyside board to fill a longstanding council vacancy on the board.
722 Urban development corporations are accountable through Ministers to Parliament. They are subject to rigorous monitoring and audit procedures. Each urban development corporation has to submit an annual report to Parliament. Under the terms of the legislation setting them up, they are required to draw up codes of consultation with local authorities on general strategy and specific planning applications. In summary it seems to me that they co-exist well with local authorities.
Your Lordships may have had in mind non-elected bodies in the health service. This matter was brought to our attention by the noble Lord, Lord Ennals, and by my noble friend Lord Rippon of Hexham. As I explained during the debate in this House on 22nd February, delegation of authority is a central theme of the White Paper Working for Patients. Ministers can indicate the overall direction of policy in the NHS, but they cannot and should not seek to define in detail how the implementation of these policies is managed locally. It is in accordance with this principle that the Government are proposing to slim down the membership of health authorities, and ensure that the actual managers and people from the local community are members. Community health councils will be retained as a channel for local consumer views, and health authority meetings will be open to the public as now.
The creation of NHS hospital trusts and the self-governing hospitals which they will manage is another important step in decentralising responsibility. Responsibility for hospital management and its decentralisation is a key feature. The trusts will stand close to their local communities. They will have community membership, issue annual reports and hold annual meetings to report on their progress. They will be in a position to tap local pride and identification with the hospital. Their managers will also have greater freedom to respond to the needs of patients in a more appropriate way.
§ Lord Rippon of Hexham
My Lords, the Minister is emphasising the importance of local opinion. Why then are the Government turning off the directly elected representatives of the people?
§ Lord Hesketh
My Lords, I shall come to that point a little later if my noble friend will agree to that.
We believe that the changes will provide the opportunity for enterprise, initiative and enthusiasm in the health service and are the opposite of a government seeking to establish more centralised power for themselves. As I said to the noble Lord, Lord Ennals, on the occasion of the Statement on the White Paper—I have no hesitation in saying it again in answer to my noble friend Lord Rippon—one has to look at the whole of the pie and not just at part of it. The whole pie which we propose is a massive operation in decentralisation and doing and trying to achieve exactly what my noble friend Lord Rippon suggested that we should be doing.
It was perhaps inevitable that the water industry should be raised in this debate. When the water authorities were first created under the 1973 Water Act, they were fairly large bodies, with most of their 723 members appointed by local authorities. I shall not go into too much detail today because as the noble Lord, Lord McIntosh, will be aware, we shall have a great deal of opportunity in the coming months to go thoroughly over this ground.
The local authority appointments to the water authorities ceased under the Water Act 1983, as pointed out by my noble friend Lord Rippon. That Act reduced board memberships in the interest of greater efficiency. The water authorities were to operate less like local authorities and more like the boards of private sector companies and other nationalised industries.
Even since 1983 the climate has changed. It is now widely accepted that basic services such as gas and telecommunications are best provided by the private sector; with the public sector doing what it does best—regulating in the public interest. The Government will no longer make appointments to the boardrooms of this industry.
However, privatisation also requires an independent watchdog with teeth. Here we have an example of a new quango on the way, but one for which we have no sense of guilt whatever. It will ensure that we have clearer rivers and bathing waters. And it needs an economic regulator to ensure that price rises are limited to fair levels. These economic and environmental watchdogs need to be organised on a national basis, to carry out proper comparisons of the performance of up to 39 companies. Those regulators will therefore be appointed by the Government and will be the people best qualified to do the job. They will be supported by a regional network of advisory committees which will ensure that there is every opportunity for general public and local government input. Those are sound arrangements for the organisation of an industry in which the public needs to have confidence. But we will have plenty of opportunity to reassure ourselves of that fact over the coming months.
§ Lord Ennals
My Lords, I am most grateful to the Minister for giving way. Does it concern or trouble him that present showings in opinion polls indicate that roughly 12 per cent. of the population support privatisation of water and roughly 15 per cent. seem to support the Government's proposals as regards the health service?
§ Lord Hesketh
My Lords, I am most interested in the point just made by the noble Lord, Lord Ennals. Indeed, I quite understand what he is saying. I find when I go around the country to address meetings that when I arrive people are uncertain about the issue of water. Interestingly, by the time I leave, they are not only much more certain, but they are also much happier after they have heard what I have said. I am not indicating to the noble Lord, Lord Ennals, that what I said will in any way be a national earth shattering change; but I do say to him is that when the issues are clearly understood, a very different understanding is attached to them than that which he perceives in the polls which he mentioned.
§ Lord Rippon of Hexham
My Lords, perhaps the Minister will give way once again. I should like to 724 ask him who is to choose the best people? Further, why are the Government the only people to choose the best people? Can local people not choose them for themselves?
§ Lord Hesketh
My Lords, the difficulty about answering that question is that it is very much horses for courses because I am not quite sure to which groups or bodies the noble Lord, Lord Rippon, is referring——
§ Lord Hesketh
As the noble Lord, Lord Ennals, is aware, there will in fact be an element of self-appointment with the hospital trusts, if and when they come to be set up.
The noble Lord, Lord McIntosh, also addressed the position, as he felt it to be, of government interfering—if that was the word—in housing policy. In view of what he said, I think it is right to comment on the housing action trusts which I perceive he would view as part of that example. We believe that what we are setting up will improve the homes and the lives of tenants in their areas. The changes are necessary as there are some particularly difficult council estates which present problems that are beyond the local authority's capacity to deal with. Housing action trusts will be single-minded bodies which will be able to concentrate all their efforts on tackling such problems.
I should perhaps remind the noble Lord, Lord McIntosh, that I was on these Benches only last year when he proposed an amendment, which subsequently became another amendment. That amendment ensures, by reason of election, that no housing action trust will take place without that happening.
I shall now try to answer some of the points which were raised specifically during the debate this afternoon. The noble Lord, Lord Rippon, drew the attention of the House to the position of efficiency combined with Mussolini. We agree that efficiency is not the greatest or the only social good. But when resources are limited—and they always are—a pound saved by cutting out inefficiency is a pound which could be given to a deserving and needy person.
The noble Lord, Lord Graham, although he is not present in the Chamber, raised the point about the situation which exists in——
§ Lord Hesketh
My Lords, I know that he cannot be here; but I was intending to answer his point in any event because it has a broader implication. His point concerned what he referred to as the "plc-ing" of Enfield Council. I think it is fair to say that that council is an elected authority. It sees its job as being an attempt to be enablers. Of course members of the council will have to go before their electorate again. However, I do not think that that is the case with a plc. The members were elected, they will have a different view and they will have to present 725 themselves again for re-election. Further, if they are successful—which I hope they are—they will be re-elected.
The noble Lord, Lord Jenkin, opposed by the noble Lord, Lord Dean of Beswick, mentioned the issue of political affiliations and the public appointments unit. I entirely endorse what my noble friend said on the matter; namely, that there is no mention of political affiliation. The noble Lord, Lord Dean of Beswick, said that we could see people's political affiliations elsewhere. That of course is true; but the principle which exists within the Cabinet Office is that there is no question of anything other than ability and recommendation being part of that list.
The noble Lord, Lord Bottomley, drew to our attention the fact that public bodies are not accountable and operate "behind closed doors"—I believe that they were the words he used. It is possible that the noble Lord ignores the fact that public bodies have to publish annual reports, that they are open to parliamentary scrutiny and that Government Ministers are accountable to Parliament just as they are accountable for appointments.
The noble Lord, Lord Dean of Beswick, kindly said that he would only raise a couple of specific points concerning G-Mex for which he is hoping to have a fuller and longer debate on another occasion.
§ Lord Dean of Beswick
My Lords, it was not G-Mex; it was the residuary body and the way it is behaving. I should like to know whether the body is exceeding the duties which it was supposed to be carrying out. If that is so, I should like to know what the Government propose to do about it? Further, what will happen concerning its future?
§ Lord Hesketh
My Lords, I referred to G-Mex because in all previous discussions with the noble Lord, Lord Dean, we have described it as such, before going into the finer points. We believe that the residuary body has been remarkably successful. Indeed, the Government support its efforts in getting on to finish the job. As regards the questions posed by the noble Lord, Lord Dean of Beswick, concerning what will happen from hereon, I can assure him on that specific point that the residuary body will be wound-up later this year and it will hand over the public sector interests in the Manchester Central Station companies to the 10 districts. Further, the residuary body will have no role and it will be entirely for the districts to decide who sits on the board and who holds executive office. I hope that that answer satisfies the noble Lord.
The noble Lord, Lord Rippon, asked me for a definition of the word "vicious". My answer is that it is rather like looking down a telescope from different ends: the view can be different. The last point raised by noble Lords from both sides of the House concerned the quality of future candidates standing for local government. I can only answer that in one limited way—that is, from my own personal experience. My mother is standing for election to the county council for the first time in her career in the forthcoming May elections.
726 In closing, I can only reiterate that we believe we have made a contribution towards reducing the number of quangos in the country. Further, we believe that there is a misconception that the setting up of bodies is in some sense undemocratic. The Government's actions give effect to the wishes of the people who elected them with a majority. Moreover, the Government continue to be answerable to Parliament, and to the electorate, for what they do. That includes justifying the decision to set up new bodies and the appointments made to them.
§ Lord Molloy
My Lords, before the Minister sits down perhaps he will deal with the point about democratic decentralisation made by the noble Lord, Lord Rippon, which he said that he would answer. Will he give one instance of where the Government have decentralised to a democratic body any power that was previously under the control of local authorities?
§ Lord Hesketh
My Lords, at this late point my best answer is to refer the noble Lord to what I said in my Statement on the health service White Paper which clearly covers the point that he raised.
§ 5.30 p.m.
§ Lord McIntosh of Haringey
My Lords, my formal task is to thank all noble Lords including even the noble Baroness, Lady Blatch, who have taken part in the debate. I do that with complete sincerity. The debate has given me a great deal of pleasure. I gained especial pleasure from the contributions from three former Secretaries of State. My noble friend Lord Ennals made the point about the health service, which was not only unanswerable but unanswered, that all locally elected participation in it has been withdrawn. Despite prompting from his noble friend Lord Rippon, the Minister made no attempt to answer that point. It remains on the record as an accusation which cannot be denied and which the Government made no attempt to deny.
I also much enjoyed the intervention of two former Secretaries of State for the Environment. The one, the noble Lord, Lord Rippon, shooting down in flames the second, the noble Lord. Lord Jenkin of Roding, who appeared to think that because a set of procedures was laid down in letters from Secretaries to the Cabinet, that somehow meant that there was no political intervention in public sector appointments. If he will believe that, he will believe anything.
A most extraordinary argument was advanced by a number of noble Lords: that somehow the privatisation programme was reducing the influence of central government and increasing local democracy, which is what the Motion was about. Of course, the privatisation programme in itself in no way gives any greater power to locally elected representatives, the people, the consumers or anyone other than the shareholders of the new public limited companies. The fact that watchdog bodies have to be set up to supervise those new public limited companies is evidence of that fact.
727 The point we came down to in the debate was that traditionally in this country—the House knows this above all—there has been an establishment which has sought to fight against radical change by fair means or foul. Labour governments have had to fight that establishment. They have not always succeeded as well as they should have done. They have had to fight bitter opposition from those entrenched in the professions, big business and all other elements of the establishment.
This Conservative Government, faced with an establishment which was in some ways hostile to some of their more radical objectives, have found that the establishment has rolled over to allow its tummy to be tickled. It has found that the Prime Minister has administered a few sharp jabs to the solar plexus. It is an interesting matter for us to observe. It has given us no confidence that the Government have any genuine concern for local democracy; for the plurality of power in our society; or any genuine evidence that the accusations that were made in the Motion, supported by my noble friends, have been answered adequately. I beg leave to withdraw my Motion for Papers.
§ Motion for Papers, by leave, withdrawn.