Sitting of 25 July 1996

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Coventry.

NHS: Grant to Patient of Legal Aid
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
What advice they will give providers of National Health Service health care following the granting of legal aid to a patient to sue because his treatment had enabled him to outlive his prognosis.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): None, my Lords. The Government remain fully confident that the National Health Service will continue to provide the highest quality treatment, including offering realistic prognoses based on the best evidence available.
Baroness Gardner of Parkes: My Lords, I thank my noble friend for that Answer. Does she share my concern about the growing burden placed on the NHS by the fact that treatments are no longer determined just by clinicians but retrospectively by the courts? With the increasing litigation, can she tell us what is the cost of defensive medicine in the NHS?
Baroness Cumberlege: My Lords, yes, I share my noble friend's concerns. The burden on the NHS is increasing. Defensive medicine is an element that has grown increasingly. It is not always in the interests of the patient. Although I do not know the costs of defensive medicine, I know that the cost of clinical negligence settlements has increased in three years from £117.9 million to £149 million.
Baroness Hayman: My Lords, does the Minister accept that recourse to litigation is seldom the most satisfactory way of resolving complex medical negligence disputes? Does she agree that it involves large sums of public money, both in legal aid and the cost to NHS authorities—here I declare the interest of which the House is aware—usually resulting in protracted misery and dissatisfaction for all the litigants involved? Will she look carefully at proposals for alternative methods of resolving disputes in those areas, such as mediation? Can she tell the House anything of the pilot schemes that I believe are being undertaken in Oxford, Anglia and York?
Baroness Cumberlege: My Lords, I agree with a great deal of what the noble Baroness said. In my experience, when people come with a complaint they want three things. First, they want a full explanation of what happened to them; secondly, they want an apology; and, thirdly, they want an assurance not only that it will
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not happen to themselves again but that it will not happen to anyone else. Litigation seldom meets people's requirements. As she said, it is a painful and costly process to go through. As a government, we are looking at mediation. Three schemes are running in three different regions. They were set up in 1995. We expect the results of the pilots in 1997. We will look closely at them, but initial progress seems to be good. Through the Health Service Commissioners (Amendment) Act, we have made it more possible to ensure that complaints are resolved locally through mediation processes.
Lord Ironside: My Lords, is my noble friend aware that the Legal Aid Board has funded a multi-party action for alleged victims of radiotherapy treatment for breast cancer, which is unlikely to reach the High Court until at least the middle of next year? Can she now say what is the total current expenditure on the aid which has been provided for those, I believe, 120 cases?
Baroness Cumberlege: My Lords, I am aware of that court case. I imagine that it is sub judice and therefore it would be inappropriate for me to go into the detail of it. As to the expenditure granted by the Legal Aid Board, that is a matter for the board.
Lord Ashley of Stoke: My Lords, does the Minister agree that, while I concur with her general view about trying to avoid litigation, and agree with the points my noble friend made, nevertheless there are cases in which there has been negligence by doctors and the necessary compensation has not been agreed, and that people should take legal action in order to get their rights, and that that should not be discouraged if mediation is inadequate?
Baroness Cumberlege: My Lords, of course I accept that mistakes are made. When the NHS employs 1 million people some mistakes are likely to be made. We have reviewed the whole complaints procedure through the Health Service Commissioners (Amendment) Act. We are trying to resolve issues before people take them to court. When I was a health authority chairman I remember the chief executive telling me that a bunch of flowers was worth £40,000.
Lord Burnham: My Lords, does my noble friend accept that it is fairly rare for the NHS to be accused of negligence when it cures the patient?
Baroness Cumberlege: My Lords, my noble friend is referring to a case which, I understand, is not sub judice at the moment. It is a complicated case. The media coverage of it has not been accurate. In fact, the Legal Aid Board was so concerned about the coverage that, unusually, it issued a press release. There is a difference of opinion concerning the original diagnosis and what the patient was told as to the likely prognosis.
Lord Rea: My Lords, does the Minister agree that as regards this particular case there may have been a genuine clinical mistake? The patient appeared to be and was diagnosed as suffering from lung cancer, which is

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almost universally fatal whatever treatment is given for the common severe kind. In fact, the patient was not suffering from that condition and the apparent success of the treatment may have been because the original diagnosis was not correct. The patient was, in effect, condemned to death. Does the Minister agree that genuine clinical mistakes are often made even by those at the top of the profession, and that the National Health Service should make proper amends to patients who, unfortunately, are victims of that situation?
Baroness Cumberlege: My Lords, the noble Lord has outlined the case and has put only one side. It is a matter for contention, which is why limited legal aid is being granted to commence the initial investigations which need to be taken. Of course I accept that there are cases which should be resolved in court. All I am saying, as was said by the noble Baroness, Lady Hayman, is that where that can be avoided it is much better. It is possible for the National Health Service trusts to settle out of court matters involving sums less than £ 1 million.
Lord Ackner: My Lords, is not the short answer to the Question that the providers of the services should, if proceedings have been issued, apply to the court for them to be struck out as disclosing no cause of action? The facts which are put in the Question, that treatment had enabled a prognosis to be outlived, do not in any way comply with the facts as this particular misreported case has indicated. Is not the position in regard to that case, subject to whether the facts are right, that a person who was relatively fit was diagnosed as having a terminal illness which would bring about his death within a very limited space of time, that as a result he spent money on holidays, gifts and the like and ended up destitute by the time he should have died if the diagnosis had not been a negligent one?
Baroness Cumberlege: My Lords, the noble and learned Lord referred to the facts and, of course, the facts are in contention. Therefore, it would be inappropriate for me to comment on the case at the moment.

Learmont Report: Recommendations
11.16 a.m.
Lord Harris of Greenwich Lord Harris of Greenwich asked Her Majesty's Government:
When they will implement the recommendations of the Learmont Report.
The Minister of State, Home Office (Baroness Blatch): My Lords, my right honourable friend the Minister of State yesterday gave details of the steps taken by the Prison Service to improve its performance on security, including measures taken in response to the Learmont Report. The balance of Learmont recommendations is still under consideration and my right honourable friend the Home Secretary will report his conclusions in due course.
Lord Harris of Greenwich: My Lords, I thank the noble Baroness for that Answer. Does she recall that on 16th October last year her right honourable friend the Home Secretary, when making the Learmont Statement, said that security had to be the first priority of the service? That being so, why is it that after so many months have passed more than 30 of the recommendations—strangely enough, all those which cost money—have not been implemented at a time when the prison population is rising?
Baroness Blatch: My Lords, security has not been compromised in the implementation of the recommendations. Good progress is being made on them. Security has been central to them and has been given its due priority. I had hoped that the noble Lord would have welcomed the progress that is being made. The Learmont Report contained 127 recommendations, many of which have been completed or are in hand and being implemented. Only 27 are still under consideration.
Lord Harris of Greenwich: My Lords, I read the Written Answer given last night, having managed to obtain a copy of it only 25 minutes ago. Is the Minister aware that prison governors are extremely concerned about the failure to implement all the Learmont recommendations which cost significant sums of money, being aware that if anything goes wrong the Home Secretary will blame them and not himself?
Baroness Blatch: My Lords, I believe that the noble Lord is being very disingenuous. He will know that my right honourable friend set up the Woodcock and Learmont Reports, which are inextricably linked. Some of the Woodcock Report is subsumed in the Learmont Report, and vice versa. He will also know that my right honourable friend has been most open about progress; he has been given progress reports throughout and that will continue.
With respect, the noble Lord is not in power. Only a government in power have appraise and reappraise value for money and fully appraise these proposals in order to ensure that the balance of expenditure and the effectiveness of what is being done meet with those who have to pay; that is, the taxpayers.
Lord Avebury: My Lords, the Home Secretary said that expenditure was not to be used as an excuse for failure to implement any of the security recommendations. Is the noble Baroness admitting that my noble friend's allegation is correct and that all the recommendations of Learmont which will cost money have been shelved? Will she circulate a list of recommendations and the amount of money attached to each of them so that we know exactly where the Government stand?
Baroness Blatch: My Lords, I cannot do that at present because, if he reads the review, the noble Lord will know that some of the recommendations are still being considered because they have cost implications. But money has been spent and money continues to be

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spent on the introduction of more rigorous, searching programmes, strict controls on the volume of property allowed by prisoners, control on property brought in by prisoners and many other administrative changes as well as 22 recommendations of the Learmont Report on procedural security, which is very important in the running of prisons; changes in searching policy, more detailed movement control, improved workshop design, the introduction of performance indicators, which are again very important in the running of prisons, the removal of Parkhurst from the Category A estate and 16 reviews of policy, 10 of which are complete.

UN Secretary General: Re-election Support
11.21 a.m.
Viscount Waverley Viscount Waverley asked Her Majesty's Government:
Whether they will be supporting the candidacy of Dr. Boutros Boutros Ghali for re-election for a second five-year term as the Secretary General of the United Nations.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, Her Majesty's Government's long-standing policy is not to reveal their vote in elections for the United Nations Secretary General.
Viscount Waverley: My Lords, this issue threatens to become acrimonious at a particularly sensitive time for the future of the United Nations. What are the criteria by which this Secretary General shall be judged and what is the Government's assessment of his term?
Baroness Chalker of Wallasey: My Lords, Dr. Boutros Ghali has held that post at a very crucial and difficult time in the history of the United Nations. There have been excessive expectations of what the United Nations can do. That has led inevitably to disappointment with the results. We are talking here of a very distinguished statesman who has an honourable record but, like most people in this difficult world, he has not achieved all that he hoped to achieve.
As regards the future, we wish to see a more effective and efficient United Nations with real value for money for its services, particularly to the developing countries. That was what formed an important part of the G7 summit at Lyon some weeks ago. That is also what the United Nations Secretary General is working for.
Lord Boyd-Carpenter: My Lords, is it not a fact that Dr. Boutros Ghali has done an excellent job for which many people feel a great deal of gratitude?
Baroness Chalker of Wallasey: My Lords, my noble friend is right. He has done a very thorough job indeed. I believe that because we have an attitude of mind these
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days which always picks up the negative and never looks at the positive, he has not been given the credit which is truly due to him.
Lord Healey: My Lords, is it not the case that the so-called failures of the Secretary General are due to the fact that permanent members of the Security Council have voted consistently for action without providing the United Nations with the money or the troops to carry that action?
Will the Minister protest to the United States Government because, not content with declaring a trade war against their allies over Libya and Iran, they are now engaged in a McCarthy-type campaign against Dr. Boutros Ghali, who was praised to the skies some months ago by President Clinton for his services to the United Nations and the world? Does the Minister agree that it is particularly inappropriate for the United States Administration to be taking that line at a time when they still owe the United Nations 1,500 million dollars, which they have owed for some years; and when they have still not paid the fine imposed upon them by the international court for breaking the United Nations Charter in their actions against Nicaragua more than 10 years ago? Does the Minister agree with me that it is a scandal that the United States Administration should be sacrificing the United Nations to a sordid political squabble in the United States Congress?
Baroness Chalker of Wallasey: My Lords, I started off in total sympathy with the noble Lord, Lord Healey, when he talked about nations which demand action but do not provide the money and the troops. Of course, he is absolutely right about that.
He is right also to say that the United States owes 1.58 billion dollars of the outstanding arrears of 2.6 billion dollars to the United Nations. But to follow him down the byways of all his questions (plural) will not do much good in this situation. We need to bring some light and sense to this matter. The noble Lord will know from his long experience that when it comes to delving deeper into this question, he will find other Government Ministers and myself in Trappist mode on the subject.
Lord Hylton: My Lords, why is it not possible to have a proper shortlist for this important post so that all possible candidates can be considered fully?
Baroness Chalker of Wallasey: My Lords, it is probably because, by convention, the Security Council has always over many years discussed this matter on the margins of the General Assembly, and because there is great sensitivity about the rotation of the Secretary Generalship from time to time. Dr. Boutros Ghali is the first Secretary General from the African continent. Every region has now provided at least one Secretary General. It may be that something can be done in the future, but there is certainly no measure of agreement to do this in any other way at the moment.
Baroness Blackstone: My Lords, following on the question asked by my noble friend Lord Healey, will the Minister agree that Dr. Boutros Ghali should be given

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particular credit for his attempts to reform the United Nations? Although more progress must still be made, will the Minister accept that he should be given every support in that respect and that withholding dues is not the right way in which to provide that support?
Baroness Chalker of Wallasey: My Lords, withholding dues from the United Nations is not the way for the United Nations to be able to carry out its tasks. The noble Baroness is right about that. As I said in answer to my noble friend Lord Boyd-Carpenter, we very much appreciate the contribution that Dr. Boutros Ghali has made and continues to make, particularly in the area of reform. But after many years of studying the difficulty of the reform, I am not surprised that further progress has not yet been made. The crucial point is that most of the members of the United Nations and the G7 countries are absolutely united behind Dr. Boutros Ghali's efforts at reform. We must proceed with that. But he has done a remarkable job at a very difficult time and frequently without the means.
Lord Monkswell: My Lords, are the Government aware that there is a great deal of antagonism towards the United Nations exhibited by the people of the United States following what I am sure the Minister will agree is anti-United Nations propaganda in the media of the United States? Will she advise the House whether, in the discussions with the BBC regarding the future of the World Service, broadcasts by the World Service to the people of the United States to give a balanced view of the world situation are on the agenda?
Baroness Chalker of Wallasey: My Lords, I am not responsible for the editorial content of the BBC World Service, much as I often think that I could give the BBC a few good suggestions. I only wish that the Home Service would copy the World Service.
As regards the main part of the noble Lord's question, there is antagonism towards some of the sillier aspects of the activities of the United Nations, but to concentrate all that on the Secretary General, as some in the United States have sought to do, I agree is simply not appropriate. It is important that the United Nations, as an organisation, should learn from its past exploits which have not gone well, and should make sure that it follows good practice. That is exactly what Dr. Boutros Ghali is trying to do, although that may not yet be well understood in the United States.
Viscount Montgomery of Alamein: My Lords, in the light of the fact that the Secretary Generalship is one of the most onerous jobs in the world, does my noble friend agree that five years is about as much as any one person can physically cope with?
Baroness Chalker of Wallasey: My Lords, as we well know, individuals vary in their constitutions. I can only say that any man who has as much energy as Dr. Boutros Ghali at present, and who can contemplate another five years in office, has nothing but my admiration.
Lord Mayhew: My Lords, is the noble Baroness aware that her careful answers this morning will have encouraged those who think that Dr. Boutros Boutros Ghali should be re-elected?
Baroness Chalker of Wallasey: My Lords, I often find myself having to tread rather narrowly along a very fine line. I certainly do appreciate what Dr. Boutros has done; indeed, I believe that his efforts to reform the UN need every encouragement. But, on the other hand, we also know that we need those who have not paid their dues to do so and then, perhaps, the UN could do an even better job.

Northern Ireland: Long-term Unemployment
11.31 a.m.
Lord Hylton Lord Hylton asked Her Majesty's Government:
Whether they have responded to the Donnison Report on long-term unemployment in Northern Ireland, published in June 1996 by the Northern Ireland Council for Voluntary Action; if so in what terms; and if not, when they expect to do so.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield): My Lords, the Government welcome Professor Donnison's report as an important and interesting contribution to the ongoing debate on long-term unemployment in Northern Ireland. The relevant recommendations will be addressed as part of the Training and Employment Agency review of policy towards the long-term unemployed. That review will be the subject of widespread consultation in the autumn. It would be inappropriate to respond further at this stage.
Lord Hylton: My Lords, I welcome what the Minister has just said about the Training and Employment Agency. Does the Minister agree that the consultation that she mentioned should include other government departments and the voluntary sector? Would the Minister further agree that the existence of a large pool of long-term unemployed people has serious implications for recruitment into paramilitary organisations, for street violence and, indeed, for fair employment?
Baroness Denton of Wakefield: My Lords, I am pleased to be able to reassure the noble Lord, Lord Hylton, that there is already a format for consultation between officials of all departments; it is not something which is just for the economic department. As the noble Lord knows, voluntary organisations come under the Department of Health and Social Services and are very closely involved in the discussions.
I would not like to impute that the long-term unemployed are part of the paramilitary organisations. However, I would suggest that the best possible cement for peace in any circumstances is the provision of jobs. I can confirm that the Government continue their efforts

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to attract new jobs to Northern Ireland because stability of the workforce in the Province means that we must attract new jobs so as to take the final small hurdle as regards equality of employment in the Province.
Lord Williams of Mostyn: My Lords, does the Minister agree that the real key here is long-term investment which, in turn, depends on long-term stability? Does she also agree that the disgraceful scenes recently in Drumcree have been a hindrance to a policy which has, by and large, been successful? Further, as this is the last occasion when I shall be asking her a question, is the Minister aware that she has the continued support of all sides of the House as regards the extremely successful way in which she has attracted inward investment into Northern Ireland?
Baroness Denton of Wakefield: My Lords, as so often, I wholeheartedly agree with the noble Lord, Lord Williams. The hesitation in confidence in the economy of Northern Ireland created by the senseless violence that we saw in the past few weeks is to be much regretted. It is to be hoped that we can build and reassure. I am pleased that inward investors have taken the attitude of, "Let's wait and see", rather than walk away. We are grateful for that fact. I also take pleasure in thanking the noble Lord and, indeed, your Lordships for the confidence and support expressed by the House regarding the many troubles that the Province still has and the Government's determination to resolve those problems. I hope that the noble Lord's comment that this is the last question he may ask of me does not indicate that he knows something about my future of which I am unaware.
Lord McNally: My Lords, will the Minister agree to read the Hansard report of last night's debate on Manchester? The point was then made that the United Kingdom freely donates or contributes billions each year towards jobs, employment and stability in Northern Ireland. That is a magnificent act of commitment by the United Kingdom as a whole, but one which needs to be realised by both communities in response.
The Minister said that the provision of jobs is the key to peace. Both communities—and, in view of recent events, the Unionist community in particular, given the billions that it receives—should realise that peace is the key to jobs. Indeed, should they not be given a very strong message about the nature of the commitment of the United Kingdom and about the response that we expect from them?
Baroness Denton of Wakefield: My Lords, I should point out to the noble Lord, Lord McNally, that Northern Ireland is part of the United Kingdom. The Government's commitment towards working to see through the troubles in the Province is absolute; indeed, that is recognised by the people in Northern Ireland. We are fully cognisant of the fact that the friendship that we have also seen from other parts—for example, from Europe and North America—has made a difference to our ability to build a successful future. We continue to
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work towards that aim. I hope that the resolution that came out of the talks last night will play a part in helping that process move forward.

Business of the House: Statement on Defence Contracts
11.35 a.m.
Lord Richard: My Lords, I trust that your Lordships will allow me to say a few words about some information that has only just been conveyed to me. I have in front of me what seems to be the text of a Written Answer from the noble Earl, Lord Howe, to a Question from the noble Lord, Lord Peyton. I do not know whether the noble Lord has yet seen the response, but it relates to the contracts which are being placed for defence equipment.
As I understand it, it was announced by way of Written Answer yesterday in the House of Commons that the total amount involved is to be £4 billion. However, I now have a copy of the Written Answer to the noble Lord, Lord Peyton, giving details of such contracts. It appears that the Government have decided to buy a Storm Shadow missile from British Aerospace; they are buying an advanced air-launched anti-armour weapon, Brimstone, from GEC Marconi Dynamics; and they are buying 21 Nimrod 2000 aircraft from British Aerospace.
Of course, they may be absolutely right decisions; I do not know. However, it seems to me that this is a major issue upon which Parliament ought to have had the opportunity at some stage to express a view. I am afraid that I have been protesting rather vehemently over the past few weeks about the way in which the Government are presenting business to the House. But if ever there was anything which should be dealt with by way of a Statement from the Dispatch Box rather than by way of a Written Answer surely, I must suggest to the Government, issues of this magnitude—especially given the composition of this House encompassing as it does people with immense expertise in such matters; indeed, far more than I—should be dealt with in that way.
The House has not yet adjourned. The House of Commons may be in Recess, but this House is not. Therefore, I do not see why the Government should not take the opportunity today—perhaps after the debate on the Recruitment and Assessment Services, or, if possible, before that debate—to make a Statement here in Parliament so that those who know more about the issue than I do can question the Government as to the rightness or wrongness of those particular decisions.
In fact, I should point out that we had a defence debate in this House as recently as 12th July. I really do not think that governments should announce contracts of this magnitude and importance to the Armed Forces and to the Crown by way of Written Answer in this House after the House of Commons has gone into Recess. As the noble Viscount the Leader of the House is present in the Chamber, I must ask him whether some time could be made available during the course of today so as to give us the opportunity to discuss the matter and, indeed, to question the Government.

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I now understand that the noble Lord, Lord Peyton, has received his Written Answer. I am not quite sure how I got a copy of it; but, however I received it, I am grateful for having done so. Having had, so to speak, a taste of the feast in the Written Answer, I think this House ought to have an opportunity of scrutinising the menu with a little more particularity than it has so far.
Lord Peyton of Yeovil: My Lords, as my name has been mentioned and I have some part in this, I should say that I have long been a great admirer of the noble Lord, Lord Richard. At the same time, however, I am not at all sure that I should like to have him always as a filter between the sender of information to me and myself. However, in this matter I had no choice. Perhaps I may venture another comment. I have been aware of the interest of people in Somerset as regards these difficult problems which the Government have been facing. I think the noble Lord, Lord Richard, is a bit hard on the Government in condemning this letting-out of good news as soon as it was available. What is always a subject of complaint is when governments let out bad news by Written Answer at the end of a Session.
Lord Richard: My Lords, the noble Lord is being unfair to his filter. I am not suggesting for a moment that these are wrong decisions. We do not know that. I am not in a position to know that. It is not a field in which I have a great deal of expertise. I used to know a little about it many years ago when I was a junior Minister and my noble friend Lord Healey was Secretary of State for Defence. All I am saying is that these are big decisions which are taken by the Government. Parliament ought to have an opportunity to question the Government on those decisions in the usual way. I do not make that point in any great party sense; it just seems to me that this is the only sensible way for the Government to proceed.
The Lord Privy Seal (Viscount Cranborne): My Lords, I am most grateful to the noble Lord, Lord Richard, for his usual vigilance in these matters. I think I am right in saying that up until now the Government have not made a habit of making a Statement on anything except the biggest defence programmes. Trident, for instance, comes to mind. There is a clutch of orders here, decisions on which have been in the balance for some time, as the noble Lord knows. There has not only been the question of which defence systems are to be ordered, but also the timing of the announcement of the order.
There is no doubt at all in my mind that the fact that the decision has been made—and made as swiftly as possible—will be broadly welcomed, particularly in the defence community. If the noble Lord, Lord Richard, would like my noble friend Lord Howe to make a Statement later in the day, in the usual spirit of co-operation which animates our relationship I should be happy to suggest to my noble friend, who is sitting beside me on the Front Bench, that he should do so. I hope the noble Lord will also understand that as we have had no advance notice of his request, it would perhaps be more sensible if we waited until the end of
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the debate on the future of the RAS before my noble friend makes his Statement. I do not see too many noble and gallant Lords in the House at the moment. They might also want some advance notice that the Statement is to be made.
I am also well aware that this is the final day of the Session and a number of noble Lords may feel that there are other calls upon their time at such a late point in the Session. However, as always, I shall endeavour to make sure that my noble friend has some time at least to prepare a verbal Statement. However, I had hoped that the Written Answer he gave to my noble friend would have sufficed. But, as always, I am in the hands of the House.
Lord Jenkins of Hillhead: My Lords, I think that what the noble Viscount the Leader of the House has just proposed is satisfactory both as to substance and to timing. It is also a tribute to the vigilance of the noble Lord, Lord Richard.
Lord Richard: My Lords, it is not the vigilance of the filter; it is perhaps the essence of the coffee that is important in this case. I repeat that I am not sure how I got this information concerning the noble Lord, Lord Peyton, but I am grateful for having had it. I am grateful for what the noble Viscount the Leader of the House has said. Those arrangements are satisfactory. The House and Parliament ought to have an opportunity to scrutinise the matter. I repeat that I am obliged to the noble Viscount.
Lord Williams of Elvel: My Lords, is the Leader of the House saying that there will be a Statement, and if so, when?
Viscount Cranborne: My Lords, if I was even more elliptical than usual I apologise to the noble Lord. I understood that it was the will of the House that there should be a Statement. It is now for my noble friend to prepare himself for that ordeal. I hope that the noble Lord, Lord Williams, will therefore allow him perhaps to make his Statement at the end of the debate which is about to begin.

Recruitment and Assessment Services
11.45 a.m.
Lord Slynn of Hadley Lord Slynn of Hadley rose to move, That this House take note of the First Report of the Select Committee on the Public Service, on the Government's plans for the privatisation of Recruitment and Assessment Services (RAS) (HL Paper 109).
The noble and learned Lord said: My Lords, your Lordships will recall that on 8th March this year there was a debate in the House as to the Government's plans to privatise the Recruitment and Assessment Services. As a result of that debate your Lordships decided that a Select Committee should be appointed to consider the present condition and future development of the public service with particular regard to the effectiveness of recent and continuing changes and their impact on

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standards of conduct and service in the public interest. It was recommended to that committee, in the light of the debate on 8th March on the Government's plans for the privatisation of what I may perhaps be allowed to call RAS, that it should begin by reporting as a matter of some urgency on the specific matter.
It was made quite clear to the committee at that stage that if our report was to be of any use we must complete it before the Recess. That we have done. I wish to pay tribute to the willingness of the members of the Select Committee to hold a number of long meetings, often at inconvenient hours, in order that we could finish before the Recess. We have been much assisted by our two specialist advisers, Professor Richard Chapman and Janet Lewis-Jones, and in particular by our clerk, Mr. Tom Mohan, who has been under considerable pressure during this short inquiry because of the amount of time that was available.
We received a lot of evidence, although no doubt if we had all the time in the world we could have thought of other evidence to call, and I have little doubt that evidence would have been given in both directions. There may have been some in favour of the privatisation and there may have been some against it. However, I believe that we have collected sufficient evidence for our task. We asked for evidence that we thought we needed as we went along. I believe we have had sufficient to enable us to come to a conclusion. In thinking of a leisurely, long-term report it is possible to exaggerate the advantages which a task without limit sometimes has, particularly in the present case as it seems likely that the horse would have bolted before we could have said—if that had been our view—that the stable door ought to be closed. Although it might have been possible to collect more evidence, it seems to me that we had sufficient for our task.
One other matter caused us some concern. When we were appointed we thought that our report to your Lordships—it was not of course a report to the Government by whom we were not appointed—would be taken seriously by the Government. Otherwise we might have come back to the House and said, "This is an awful waste of time. It is all cut and dried and we had better get on with the remaining parts of our report". However, the noble Viscount the Leader of the House and the Chancellor of the Duchy of Lancaster made plain that our report would be seriously and carefully considered by the Government. It is obvious that for the House to have asked us and our witnesses to spend so much time producing a report on something already fully cut and dried, and on the principle of which we could have had no possible effect, would have been an appalling waste of time. That would have been an exercise in which we are sure the House would not have wished us to indulge.
We were, therefore, disturbed (I have to say) to be told in the course of the evidence that we received from the Deputy Prime Minister that the decision had already been taken and, as he put it,
"we intend to proceed … The fact is that we have made up our minds as a Government that the policy of the Government is to proceed with the privatisation of RAS. The steps are in hand, the bidding process is under way".
Despite that statement in evidence to us, we were, and are, a fairly resilient team; and we decided to go ahead and fulfil what we saw to be our duty to the House. But we fully recognise that the principal, if not perhaps the only reason for privatising RAS was one of government policy: that, as a matter of political philosophy, or political policy, with few exceptions any aspect of the public service which could be privatised should be privatised. The Deputy Prime Minister and the Chancellor of the Duchy of Lancaster made that clear to us.
However, despite that, we equally believed that a committee of this House, seriously set up, seriously constituted and seriously reporting, would be seriously regarded by the Government as to its conclusions. If it were naive of us to come to that view, it is a sad comment on the process in which we have been engaged.
Whether the policy of privatisation is right or wrong or is good or bad was not a matter for our committee. The sole question, as we saw it, was whether in the public interest and from the standpoint of the public service it had been shown that the privatisation of RAS was necessary or desirable. We were required, as we saw it, to come to that conclusion on the evidence that we received. All our witnesses, without exception, agreed that RAS had done an excellent job. Its standards were high. Its activities were increasing and it had a larger turnover and profitability in the last year or two than previously. It was quite plain that everyone accepted that RAS understood what it was doing, being itself a part of the Civil Service, in recruiting those who will become the corps of senior officials in years to come.
Having considered all that evidence, we said in our report:
"We have seen nothing which suggests that in the work it has done RAS has been anything but successful … The overwhelming weight of evidence we received was that privatisation was undesirable and unnecessary".
There was much debate about what is called the public service ethos: dedication, loyalty, and commitment to the public service. This was said by many of our witnesses to be a critical factor which had contributed to the high reputation in which the Civil Service here is held both in this country and abroad.
On the evidence we concluded:
"We believe that there are distinct advantages in maintaining an integrated, in-house recruitment process for the fast-stream"—
that is the brightest of the new graduates who come into the Civil Service—
"in which all stages of recruitment are carried out by or under the … supervision of people with experience of the Civil Service and its ethos".
It seemed to us that even if RAS does not control the final selection process—it is done, and will continue to be done by the Civil Service—the activities of RAS would not so obviously be carried out in the interests of the public sector if RAS became part of a recruiting group concerned not just with recruiting for the Civil Service but for private industry; and not only recruiting in this country but for organisations abroad, as is apparently contemplated and indeed encouraged.
We recognise that there is some risk of a conflict of interest if the new RAS is to deal with both the public service and the private sector. We came finally to the conclusion that no case had been made out for privatising RAS, and that there were, as we have set out in our report, very positive reasons against it.
If, despite this clear conclusion, this clear message from the committee, RAS were still to be privatised, we do not find it possible to comment on all the detail of the various draft contracts which even at this stage are not fully finalised. We could only look at some of the principal safeguards which we thought to be necessary.
I shall not go into those in detail. I mention briefly three or four. We were troubled about the use of details of candidates applying for posts in the Civil Service if this were dealt with privately. We came to the view that the arrangements for protecting candidates' details after they had applied are sufficiently protected in the draft contract.
We were much impressed by the evidence we received about the importance of ongoing research as to the kind of testing procedures which are adopted for this fast-stream recruitment. We recommend that if, contrary to our view, RAS should be privatised, the company or its owners should be contractually obliged to continue this ongoing research into the efficiency of the tests.
We recommend that records should be kept by the Public Record Office as they are now, with certain adjustments, even if RAS is to be privatised.
We were much exercised by the position of the intelligence and security services. Would it really be right for recruitment to the intelligence services to be conducted by a privatised RAS? We came firmly to the view that the intelligence services should be wholly excluded from the activities of the new RAS, if RAS is to be privatised.
Finally, we recommended that more attention should be given to the position and future of those members of the staff of RAS who would be affected by the privatisation. We think that the Government should look again at the future of the staff who may not wish to remain with the privatised RAS but who may find that they are equally unable to stay in the public sector.
These are matters of detail. The real question for us was not whether, if RAS were privatised, the new RAS would become bigger, and its owners richer—perhaps it could. The real question was: had it been shown that RAS would provide, or would be likely to provide, a better service for the public sector?
Our conclusion is clear. The case for privatising RAS has not been made out and there are positive reasons against it. In their evidence, Ministers recognised that there are exceptions to the general privatisation policy that activities for the public sector should be carried out, so far as possible, by the private sector. I have to say that, on the evidence we received, I doubt whether there can be many clearer examples of an activity which should be treated as an exception and left in the public sector than RAS itself. Accordingly, our report concludes by urging the Government to reconsider the whole matter. I beg to move.
Moved, That this House take note of the First Report of the Select Committee on the Public Service, on the Government's plans for the privatisation of Recruitment and Assessment Services (RAS) (HL Paper 109).— (Lord Slynn of Hadley.)
12 noon
Viscount Cranborne: My Lords, needless to say, I am extremely grateful to the noble and learned Lord, Lord Slynn, for undertaking the onerous task that he has and to the members of his committee. I know that he is not exactly the idlest Member of your Lordships' House. He has many other things to do, particularly in his judicial capacity. It is typical of the way in which he addresses himself to public service that he so cheerfully undertook an onerous task.
I am also grateful for the speed with which the committee reported. In view of some of the remarks that the noble and learned Lord made this morning, I hope that to some extent I can convince him and the House that the Government have read his report with considerable care and take what he has to say extremely seriously.
I was able to confirm to the House on 10th July that it was the Government's intention to give rapid consideration to the committee's report and we have had a week in which to examine it and respond. As the noble and learned Lord said, the report concludes that the committee remains unconvinced, to put it mildly, that the privatisation of RAS is necessary or desirable. I would, however, point out that the success of the Government's privatisation policy is reflected in the number of countries now privatising public businesses. I am only too well aware that the committee considers that RAS is not just another public business. However, RAS is responsible only for the operational aspects of recruitment. The recruitment selection decisions will remain with the Civil Service after privatisation. The assessors for the selection boards will continue to be approved by the Civil Service and will continue to include many current and former civil servants. The decisions on the success or failure of candidates at those stages will therefore remain a public sector responsibility.
The committee questioned whether privatisation was proposed because of performance failures by RAS. As the noble and learned Lord pointed out, the position is the reverse. The performance of RAS is, the Government feel, an excellent base on which the new business will be able to prosper and expand. So the Government are clear that as a centre of excellence in recruitment and assessment services to the public sector, RAS should be released from the constraints of public ownership and set free to develop in the private sector. As a result, it will be free to build on its present share of Civil Service recruitment and to provide services to new customers.
We are also grateful to the committee for its consideration of the privatisation process and for its detailed recommendations. The committee's work will help to ensure that the privatisation is completed in a way which will bring the greatest benefits. Indeed, the

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report states that some of the safeguards in the fast stream contracts were introduced following the committee's meeting with my right honourable friend the Chancellor of the Duchy of Lancaster.
I can report that the Government are able to agree, either wholly or in spirit, with almost all the recommendations contained in the report. We accept, in effect, nine out of the 10 recommendations made. With the permission of the House, I wish to address the specific points made in turn.
The report questions the work involved in administering the fast stream contracts once they have been let to the new company. RAS delivers its fast stream services to customer departments under the guidance of what is known as the Customer Consortium, for which the OPS acts as a secretariat. When the Customer Consortium was established in 1995 the intention was that the group could act as what is known in the jargon as an "intelligent" customer in its own right. The Government accept that the consortium will need some additional support as a result of privatisation.
The plan is that that support will be provided by the OPS through three additional posts. Most of the roles mentioned in the report already fall to the consortium and the OPS, as a result of running the existing fast stream schemes. Those roles will continue and intensify after privatisation takes place. In addition, the OPS will have a new contract management role. We believe that all that can readily be handled by the anticipated three extra posts.
The report suggests that there are no obvious benefits from this work and that it will be more expensive. The Government are confident that privatisation will provide better value for money for the taxpayer than the current arrangements. My right honourable friend the Chancellor of the Duchy of Lancaster will, of course, continue to assess it carefully when final bids are received, as will customers for fast stream recruitment.
The Government agree with the committee that the privatisation should not be completed if the final bids do not represent good value for money. I owe it to noble Lords to try to give an assessment of how that value-for-money evaluation will be made. The arrangements have already been carefully defined, in consultation with the fast stream Customer Consortium. First, bidders have been assessed against a strict quality threshold. All the short-listed bidders have passed that requirement. Secondly, a financial analysis is being prepared to compare the final bids with the cost of retaining RAS in the public sector over the next five years. The analysis of the bids will take account of the proceeds from the sale, the fixed prices quoted for the fast stream contracts and the additional monitoring costs.
The committee also recommends that we consider strengthening provisions in the fast stream contracts regarding the use of candidates' details before they have applied for the fast stream. I wish to reassure the House that the OPS will continue to be responsible for marketing the fast stream scheme. That will include, for example, the annual university "milk round" to generate applications for the Civil Service. So the committee's
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concern that candidates may be influenced by the company to take other jobs at that stage does not, I suggest, arise.
The new company will process applications and administer the selection process. We agree that safeguards are necessary to protect information on candidates and to prohibit the contractor from using candidate details for purposes other than recruiting to the fast stream. We do not believe that the company would risk those large and prestigious contracts by misusing information. However, following earlier expressions of concern from the committee, we have added to the safeguards in the contracts to protect information on individuals who have contacted the company in relation to the fast stream but have not yet applied, and to forbid the use of failed candidate information for three months after candidates have failed.
The committee recommends that an annual report should be made to the Civil Service commissioners, explaining exactly what use has been made of candidate details for those candidates who have applied for the fast stream. The Government agree with the aim of that recommendation, but so far as implementation is concerned, it is the Customer Consortium rather than the commissioners which is responsible for such aspects. So the contract requires the new owner to report to the consortium on each competition with details of the numbers of successful and unsuccessful candidates. That information will be published in the annual report on the Civil Service Fast Stream which is issued annually by the OPS. In addition, the OPS, on behalf of the Customer Consortium, will have full access under the fast stream contracts to records and information for audit and monitoring purposes.
The report rightly recognises that under the fast stream contract RAS will be obliged to undertake regular research to ensure that the fast stream tests are kept up to date and developed further. Professor Bartram, in his report for the OPS on the fast stream made similar recommendations on the need to analyse the short-, medium- and long-term validity of this recruitment process. We endorse the importance of such research and assessment and agree with the principle of the committee's recommendation. However, we believe that it is mainly customer departments which should conduct any long-term reviews of the scheme's effectiveness. It is departments which are best placed to assess the performance of those recruited through the fast stream scheme. The new company will be required to maintain the necessary records to ensure that such evaluation can take place. It might also be appropriate for the results of those evaluations to be published in the annual fast stream report.
The report recommends that the new company's role in research should be controlled by the Government. We agree. Under the fast stream contracts the company is required to undertake regular research—using suitably qualified staff—into tests, exercises and other aspects. The contract specifies that this research is needed to ensure that the fast stream schemes comply with the principles of selection on merit by fair and open competition; comply with equal opportunities on race and gender; maintain the relevance and usefulness of the

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questions and exercises; and reflect the highest recruitment and assessment industry practices. That is a clear set of performance requirements. The OPS will also be able to require all necessary documentation to conduct the sort of independent research to which I have referred. We believe that this will prove an effective and efficient means of ensuring that the necessary research continues to be carried out.
We are also able to agree on the need to retain candidate records. The fast stream contract requires the new owner to hold on to all necessary information on successful candidates for at least 20 years. The new company will be required to maintain the same records in relation to recruitment schemes as are presently required.
The report discusses the issue of ownership, particularly foreign ownership, and the implications should the new owner of RAS change at some later date. I hope that I can offer some reassurance on how, in effect, we can meet those concerns. The fast stream contracts contain provisions which enable the Government to terminate the contracts should the owner of RAS or its parent company change. The Government would be able to decide whether they were satisfied with a proposed new owner or parent company. If the Government were not satisfied, the change of ownership would be extremely unlikely to proceed because of the prestige and financial importance of the fast stream scheme. The scheme accounts for one-third of the business.
The committee also raises the question of recruitment to the Security Service and GCHQ. The noble and learned Lord also emphasised that point in his remarks. This is a very sensitive issue which we have considered fully. The report suggests that all such recruitment should be retained in government. However, this would deny the Security Service and GCHQ the benefits of recruiting through the fast stream scheme, which provides good access to high-quality graduates. However, the new company will not be responsible for the final selection decisions on recruits. Those decisions will remain with the Security Service and GCHQ. They have both been consulted and I am informed that they are content with those arrangements. The Government do not therefore feel that they can accept that recommendation.
The report also raises concerns over the ability of the Government to bring the fast stream staff back into the public sector should that be necessary. We, of course, consider that would be an unlikely requirement as the new owner is being selected according to stringent quality and financial criteria. But I understand the committee's concerns and accept that we should be prepared for that risk, however small it may be. The contracts have termination provisions that require the owner to provide the OPS with certain information on the staff carrying out the services in the contract, together with records and information as to the operation of the contract. The Crown, of course, retains ownership of all fast stream intellectual property and tests. If TUPE applied then the staff could transfer back to government.
Finally, the report requests that further consultation take place with staff. Since the announcement, the staff have been kept fully informed of progress. My right
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honourable friend the Chancellor of the Duchy has visited the staff in Basingstoke to hear their concerns. He will visit them again in August to hear their views once they have had a chance to interview the short-listed bidders and before a decision is made on the final bidder. Their views will be taken into account at that stage. I should add that the major customer departments were consulted before the decision to privatise was taken. The Fast Stream Customer Consortium has been closely involved in drawing up the arrangements for the fast stream contracts and in other aspects of the privatisation process.
I should like to repeat my gratitude to the noble and learned Lord, Lord Slynn, and the committee for their careful work and useful advice. I am only sorry that the Government and the Select Committee should disagree on the principle of privatisation. I should say that we expect to receive final offers in August and to announce the preferred bidders in September.
Before I sit down, perhaps I may say something that I should perhaps have said at the beginning of my remarks. I am sure that I am not alone in this House when I say that I greatly look forward to the maiden speech of the noble Lord, Lord Gillmore of Thamesfield, who, I know, will become a very great ornament to this House. I look forward to that skill for which he is notorious in other spheres, and with which he manages to skirt controversy, during the course of his maiden speech.
12.16 p.m.
Lord Jenkins of Hillhead: My Lords, I can at least agree with the noble Viscount on one matter; that is, in looking forward to the speech of the noble Lord, Lord Gillmore, who will combine the double experience of having been Permanent Under-Secretary of the Foreign Office with having been a member of the Select Committee.
We have had a fairly rough end to the Session. Relations in this House, even before today's decision and debate, have been more strained between the parties than at any time since I came here. I cannot say that the response to the report is likely to ease that position. The Government's handling of this matter has been an almost unbelievable story of dogma, arrogance and dissimulation.
In March we had a debate in which the speakers, with the exception of the Minister and one Back-Bencher, were unanimously against the Government and their proposals. Those who were against the Government included one former Prime Minister, one former Chancellor of the Exchequer, three former Conservative Cabinet Ministers, one non-Conservative former Cabinet Minister, three former Permanent Secretaries, plus one Secretary of the Cabinet, one head of the Civil Service and one former Principal Private Secretary to the Monarch. So there was a substantial spread on that occasion. There was also one former Clerk of the Parliaments.
We then had a Division in which, with very large numbers voting given that the debate took place on a Friday, the Government were beaten by two to one, a size of adverse majority which I believe is without recent precedent in this House against the Government.

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It was then agreed—and the Lord Privy Seal was very helpful in this matter—that the Select Committee on the Civil Service should be asked to produce an interim report on the specific issue of the future of the RAS. It was asked to do so quickly so that its views could be taken into account before a decision was reached. The committee exactly discharged that mandate and gave us the report on 19th July. We are very grateful to the noble and learned Lord, Lord Slynn, for the work he did as chairman of the committee and to its other members. We had the assurances of the Lord Privy Seal that full account would be taken of the report. Those assurances were repeated by the Chancellor of the Duchy of Lancaster in early evidence to the Select Committee.
That report was not merely "nearly unanimous", as was the March debate in this House; it was unanimous without qualification. No member, no Conservative dissented. The report was as forthright as it could be:
"We do not consider that the case for privatising RAS has been made out. There are, even in the context of the Government's policy on privatisation, positive reasons against it. We urge the Government to reconsider the matter in the light of the factors mentioned in the report".
That is as ringing and clear a recommendation as it is possible to imagine.
If I may say so, to this central issue, as opposed to some peripheral ones, the Lord Privy Seal did not apply himself in his speech at all this morning. It is not the least engaging feature of the Lord Privy Seal that he knows when he has a bad case and when he has a good case, and his style of speaking is very different in the two circumstances. There is no doubt at all what was his judgment of the position in today's debate.
So that was the view of the report of the Select Committee, as unanimously and as clearly expressed as it could be. And what happens? What happens is that the caravan of dogma moves relentlessly on.
But in order to appreciate the full enormity of the Government's behaviour, one has to read Mr. Heseltine's evidence to the committee. At the time, I heard he had given a rich performance, but as I gathered that it was on the afternoon following the morning when he had covered himself with glory in his cross-talk cabaret act with Mr. Mawhinney, I thought that perhaps he might be suffering from a mixture of exuberance and embarrassment and should not be taken too seriously. But such amused tolerance could not survive a reading of his evidence.
What did he say? Not merely did he contradict the assurances of the Lord Privy Seal and the Chancellor of the Duchy and tell the committee, effectively, that it was wasting their time. Caesar had spoken, and that was the end of the matter.
But still more serious in my view—and not known to me at the time until the evidence was published—he undermined what until then had, I think, been the central, if unconvincing, plan of the Government's case, which was that the public service ethos and the traditions of the British Civil Service would not be undermined by the privatisation of RAS. Mr. Heseltine, per contra, on the contrary made it clear that this was precisely what he wanted to do and what the
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Government wanted to do. When asked what were the restraints from which he wished to free RAS, he listed at number three,
"the whole ethos of public sector life".
And lest there should be any misunderstanding, he added:
"I think one of the things we are trying to do is to change the culture of the Civil Service".
And just for good measure he scouted any idea that any civil servants are activated by any special sense of public duty or service.
So out of the words of the Deputy Prime Minister, who appears to be able to make other Ministers dance like puppets on a string, in his words and in his stated desire, go 143 years of the successful Trevelyan-Northcote tradition which has produced a widely envied British institution of unique quality.
This would be an arrogant display of executive power for a newly elected government, dripping with mandates and sitting surrounded by a vast and fresh majority in the new glory of the Front Bench in the other place. It recalls the "We are the masters now" statement, which most improbably, as it now seems, Lord Shawcross delivered himself of in 1946. At least Lord Shawcross did have the cohorts behind him, whereas now we have a government who for years have commanded the lowest level of popular support in history, with a totally insecure parliamentary majority, who nearly every day are flaking off a new piece of disintegration, and yet insist, against all the evidence, against the views of every other party, as well as neutral opinion, in forcing through this bit of petty, yet vastly damaging, dogma. It really is a monstrous piece of behaviour.
When the obituaries of this government come to be written, which I hope will not now be long delayed, this will stand out as the most unnecessary, inexcusable and irresponsible of their dying squawks.
12.26 p.m.
Lord Gillmore of Thamesfield: My Lords, it is with a sense of great privilege, but, I am bound to confess, overwhelmingly with a sense of deep trepidation, that I speak today. I am sure that your Lordships will all recall—some perhaps a little more dimly than others—the occasion of your Lordships' maiden speech. For a former public servant, and particularly for one who was the accounting officer of a department of state, the occasion is singularly daunting.
The Palace of Westminster is inevitably linked in the mind to the stress of inquisition at the hands, not always the most merciful of hands, of one of your Lordships' Select Committees or of a Select Committee of the other place. So, more than many, I have cause to be grateful for the generous and courteous conventions which attend a maiden speech.
Also, in deciding to speak today I have been particularly mindful of one of the most important of the conventions referred to—not without a hint of challenge, I think, by the noble Viscount the Lord Privy Seal—that a maiden speech should not venture into the quicksands of contention. Had the report of the Select Committee not been unanimous, I would certainly not have sought

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to intervene, and your Lordships would have been spared these few minutes. But thanks in great measure to the concise skill of the Select Committee's chairman, the noble and learned Lord, Lord Slynn of Hadley, the committee's report is endorsed by all its members, and consequently your Lordships are not to be spared.
In a debate on a different subject earlier this week, a noble Lord referred not to the conventions of this House but to its ethos. From my brief but I hope attentive experience of the past few months, I think I can say that one would have to be of singular insensitivity not to be aware that such an ethos is real and present. But in this, if in nothing else, your Lordships' House is not unique. I would like, if I may, to say a few words on a subject already mentioned by the noble and learned Lord, Lord Slynn of Hadley, and the noble Lord, Lord Jenkins of Hillhead, which runs like a thread through this report and in the evidence given, both oral and written, and which I am sure will be a leit motif in the further work of the Committee—the ethos of the public service.
"Ethos" is perhaps a rather grand word for a relatively simple idea. My dictionary defines it as the characteristic spirit or attitude of a community or group. In the case of the public service, this ethos derives directly from the great Northcote-Trevelyan reforms of the 1850s. Many of those who gave evidence to the Committee defined it in some detail. Others said that it was unquantifiable but quite distinctive. The former referred to characteristics of integrity, loyalty, impartiality—political impartiality, in particular—trust, objectivity and fairness. They drew particular attention to a system of recruitment which is not only based on merit and equality of opportunity, but is sufficiently open and transparent to justify public confidence in its inherent fairness.
That is not to say that on each and every occasion every public servant without exception has lived up to those high ideals. That would be absurd. Nor is it to say that the public service should be frozen, unchanged and unchanging in a world that no longer exists. In truth, the Civil Service has seen its fair share of reform and change in the past decade and a half. The buzz words of modern management techniques have hummed up and down the corridors of Whitehall as never before: management by objectives; next steps agencies; contracting out; privatisation; delayering; flattening command structures; empowerment; fundamental economic review strategies; and so on. With those reforms has come a reduction of nearly one-third in the number of permanent staff, the majority of whom are now employed in executive agencies.
It would be hard to argue that many of those changes have not brought real improvements. On others, perhaps, the jury is still out. But it is important not to confuse changes in management techniques with changes in the ethos. British cavalry regiments no longer ride into battle on horseback. They drive hugely sophisticated armoured vehicles stuffed with electronic wizardry and with fire and control systems. But I doubt whether anyone would seriously argue that the ethos of British regiments has changed or should change simply because the tools of warfare have changed. Their
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morale, integrity, loyalty, dedication and sense of duty are different matters. The same is true in the civilian branches of the public service.
I realise that for some, and I think it is a small minority, those characteristics—I dub them qualities—smack of yesterday and old hat. They may even be regarded as removed from the hard-nosed and aggressive realities of today's world, and perhaps even be untrendy.
Of course there are lessons to be learnt from the private sector. Many of the reforms that have taken place in the public service derive directly from the example of private enterprise. But I for one do not believe that the ethos of the public service is or should be the same as the ethos of the private sector. I speak as one who has worked in both. To each his own, and that is right and proper.
So I respectfully draw attention to paragraph 69 of the report. The maintenance of the public service ethos and the principles of duty and loyalty at the service of whatever government are in power, principles which by and large have served this country well, are a matter of national interest. Those principles may be of long standing. They may even, alas, be regarded as untrendy. But it would be foolhardy in the extreme to place them in jeopardy. In my submission, we need them as much now as ever we did.
12.34 p.m.
Baroness O'Cathain: My Lords, it gives me truly great pleasure to rise to congratulate the noble Lord, Lord Gillmore of Thamesfield, on a splendid maiden speech. I am quite sure that in the years to come his description of the ethos of the public service will become words of reference.
As the noble Lord spoke, I was reminded forcefully of the first time that we met. It was at a weekend conference at Sunningdale which was attended by senior civil servants. I recall that they were all permanent secretaries. Perhaps I may say as an aside that it was the first time that I felt old—as when policemen look young, you feel you are old. I felt that all the permanent secretaries and certainly the noble Lord, Lord Gillmore, looked much younger than I expected. On that occasion, his contribution was thoughtful, original and quietly made. It made a huge impact on me. Today, there has been a repeat performance. He made a great maiden speech to which we all listened in rapt attention.
The noble Lord has had a sparkling career. After King's College, Cambridge, he started work in the private sector. He moved on to teaching and was then a late entrant to the public service, in his case the Diplomatic Service, in 1970. From that point his career truly went into orbit: overseas postings in Moscow, Vienna and Paris; head of the defence department at the Foreign and Commonwealth Office; visiting professor at Harvard; and the top job—permanent secretary at the Foreign and Commonwealth Office, head of the Diplomatic Service from 1991 to 1994. Now he is back in the private sector. We are all very lucky indeed to have him in this House. We wish him well and know that all his future contributions, which we hope will be frequent, will be memorable.

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It is with a sense of déjà vu that I take part in this debate. As many noble Lords will recall, and it has already been referred to, I am the Back-Bencher. I was somewhat of a lone voice on the stance that I took in the debate on 8th March on the subject of the privatisation of RAS. Following that debate, as we have been told today, the Select Committee on the Public Service was appointed. Its first remit was to look at the privatisation of RAS.
The 8th March is not that long ago. In fact, it seems only like yesterday to me because I am still reeling from the metaphorical arrows slung in my direction on that occasion. The 30th April, the date of the appointment of the Select Committee, is an even shorter time ago. I mention those dates because in contrast to the time allocated for investigations carried out by another Select Committee on which I have the honour to serve, this investigation was carried out at breakneck speed. From the very beginning of the investigation, it was obvious that we ran the risk of producing a document that could only investigate the issue in a somewhat hasty and superficial manner. Frankly, I personally did not believe that we should be able to produce a report in such a timescale. We owe a great deal of gratitude to our chairman, the noble and learned Lord, Lord Slynn of Hadley, who managed to drive us at a ferocious pace to have the report concluded.
That situation disturbs me from two points of view. First, the whole subject generates an immense amount of emotional response. There was a great deal of that in the witnesses that we examined. Secondly, there was not sufficient time to take evidence from witnesses with practical experience and professional knowledge of the whole field of recruitment and assessment outside the public service. As RAS was to be privatised, I thought it fairly important that we should have that evidence. I hope your Lordships will not feel that, because the recommendation does not concur with the views that I expressed on 8th March, I am suffering from a huge dose of sour grapes. I am quite ready to change my mind, provided that the evidence I receive supports such a change of mind. In this case, the overwhelming evidence was against the privatisation of RAS. But, in my opinion, we did not have enough time to hear the other side of the story. However, I have to associate myself with the conclusion that the case for privatisation of RAS has not been made out—definitely it has not.
There was something else which disturbed me, and this has already been referred to today; namely, the attitude of my right honourable friend the Deputy Prime Minister. The reality of that afternoon was just as bad as the extract reads in the report; indeed, we now have the evidence. I understand only too well the irritation that can be felt when one is quite sure that a decision is correct and it is questioned by people who do not have the same knowledge. But there are niceties of behaviour which have been established over long periods of time in both Houses of Parliament. I have to confess that I was a little taken aback.
That is all history now. The privatisation of RAS will go ahead and I think it behoves us to be positive about it, wish it a fair wind and hope that the genuinely felt fears expressed during the investigation will not transpire.
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At the risk of boring the House I would like to reiterate the point that I made on 8th March, to the effect that I believe personally that the privatisation of RAS is a good thing, reaching that conclusion by, and I quote, col. 552:
"weighing up the pros and cons from the perspective of experience in the recruitment and assessment sector both as a user and as a manager of such a function within the normal functions of a commercial business".
Just the other day I spoke about graduate recruitment to the previous Director of Personnel of British Airways, who ran the function until 1st January this year when she was promoted to an even more senior post. She told me that British Airways does sub-contract about 50 per cent. of the activity, and the recruitment in British Airways of graduates would be similar to the fast stream recruitment to the public service. The outsourcing work that they have decided not to do themselves concerns administration, selection, assessment centres and psychological assessments on a one-to-one basis; in other words, the functions carried out by RAS for the fast stream. It is therefore not unusual to do that work outside.
When I asked why this information could not be conveyed to the Select Committee it transpired that the letter seeking evidence landed on the desk of a member of staff of the recruitment office. If you belong to a large organisation which has a fairly high profile, like British Airways, and is regarded as a successful organisation, I can tell you that you get something like a dozen letters a week looking for information from students who are doing PhDs or postgraduate work on business studies. I guess that what happened to this was that it was dealt with in the same way because the request was not dealt with at the highest level and appeared merely to be what one would call a normal inquiry. Not too many people outside these hallowed walls realise the importance of a Select Committee, and I suggest that when we look for evidence in future there should be some strong comments made to the effect that this is very important and it is in the national interest that the evidence is supplied at the highest level.
Similarly, no headhunters (which of course is the colloquial term for search and select consultants) responded to the letters from the committee. This is a real shame as I believe their evidence would do much to convince the opponents of privatisation that the functions carried out by RAS were not unique, but are functions which are undertaken in the general initial recruitment process in major companies in the country and which are outsourced by many efficiently run organisations who are looking for the best candidates, do not forget, for their own fast stream.
I am aware that there is a strongly held feeling that recruitment to the public service is different. And of course it is. But it is not all that different. The skills and methods used by RAS are used by many other organisations in the recruitment and assessment business.
During our deliberations the fear was expressed that if RAS fell into the hands of headhunters it would be disastrous. It is interesting to note that the shortlist of potential owners of RAS does not include a single

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headhunter, so that concern has been removed, but it does include a company with a long history of developing psychometric testing and with a very strong research function, a company indeed with a proven record of success that I have used in the past. I hope therefore that that information helps the members of the committee who still feel very concerned about the likely future owners—I am not saying that that company is going to be successful—of RAS.
I feel that it is important that we try to take the heat out of this issue and for my part I am grateful to my noble friend the Lord Privy Seal for unknowingly removing the last vestiges of concern I had on some of the recommendations. Although I do not know whether I am right, I believe that the detailed comments of my noble friend indicate that great notice has been taken of our report in the past week, despite the widely held view within the committee that we were wasting our time and whistling in the wind. I continue to take heart from the fact that other privatisations have been most successful. Our public service will use a privatised RAS in the same manner as it uses RAS currently, and I am sure that we shall continue to attract the best brains into the public service even if the case for the privatisation of RAS has not been made.
12.45 p.m.
Lord Taylor of Gryfe: My Lords, first, I wish to express my appreciation to the chairman for his masterly handling of this difficult subject in a very short period and to my colleagues who served on the committee for their spending long hours studying the evidence and evaluating the subject. I want also to add my congratulations to the noble Lord, Lord Gillmore of Thamesfield. It was obvious during the deliberations in the committee that his presence would be of immense value to the House of Lords in general.
Perhaps I may make an apology to the House. To get home by 10 o'clock tonight I have to get a four o'clock train and that is sometimes difficult with a tube strike in London. I have to get to King's Cross, so I apologise to the Minister and to the House if I am unable to remain for the conclusion of this debate.
This has been a deeply disappointing morning. At the first meeting of this committee I suggested that we should proceed no further, that we should advise the House that the Government have made up their mind and that the House should be made aware of the fact that its decisions and its deliberations counted for nothing in this matter. I was convinced by my colleagues on the committee that this was a quite unsympathetic and irrational view to take of the Government's intentions. Subsequently Ministers appeared before us and gave us assurances in connection with our deliberations. Roger Freeman said:
"I look forward to seeing the conclusions of the Report of that Committee, which I understand will be available before the Summer Recess—and before we complete any arrangements for the transfer of the ownership of RAS. I give my assurance to this place and to the other place that the observations of the Committee will be taken into account and carefully considered".
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It was only on the basis of that kind of assurance that I felt certain that the report would be given due consideration and due weight. Indeed, the Lord Privy Seal, when we discussed this earlier on a Question, said that if this committee produces a show-stopper report, it will be given due weight by the Government. I never quite found out what a show-stopper report was, but if you read the conclusions of this committee, it reads to me like a show-stopper report. It simply says that the case has not been proved.
Apart from the detail of this report there is an important constitutional matter with regard to the role of the House of Lords. We debated in this House the future of the House of Lords, and the Government were very strong and very firm that the House of Lords as presently constituted had an important role to play in the decision making of government.
The House of Lords has considered this matter. The House of Lords has reached definite conclusions. The House of Lords has made its recommendations but, as has already been said, when the Deputy Prime Minister appeared before us he made it abundantly clear that, whatever the pretensions of this House to being a revising Chamber, he had no doubts; he had made his decisions and what the House of Lords was going to consider did not matter at all. I suggest that is a very important matter, duly emphasised by the noble Lord, Lord Jenkins of Hillhead.
There is another, more moral aspect to this matter. When we return after the Recess, the Government may have only six months more left to live. I do not know what the decision of the electorate will be. But the Government are about to produce a shortlist of candidates for this job and to sign five-year contracts with the successful company. Any government which succeeds this Government will have to honour those obligations or pay to discharge their commitment.
Lord Marlesford: My Lords, I thank the noble Lord for allowing me to intervene. He is suggesting that the matter is much more cut and dried than it is. If he looks at page 70 of Mr. Heseltine's evidence he will see in the answer to question 454—the question asked by himself—that Mr. Heseltine was saying that they would have to consider whether or not to accept a bid. It is therefore more open than the noble Lord suggests.
Lord Taylor of Gryfe: My Lords, I do not know whether the noble Lord, Lord Marlesford, heard the Lord Privy Seal this morning. If he did, he would have heard that the negotiations are at a fairly advanced stage. Indeed, if he reads the report he will see that the firms are named and listed as being in the final running for appointment. Therefore we can assume that the process is proceeding.
I have never regarded this matter as a party matter. I am speaking for the Labour Party and from these Benches. But this matter relates to the organisation of the British Civil Service. It is a matter of great importance, as my noble friend Lord Callaghan of Cardiff said when we addressed it originally. The ethos and structure of the Civil Service has always been a matter of consensus and not a matter of party debate.

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I regret to say that it has now been introduced as a matter of dogma; of party philosophy—"We are going to change the Civil Service". I regard that, as should the House, as totally unacceptable.
I was interested to read and listen to the evidence submitted to the Committee. I shall not go through it all, but I will refer to page 90 of the report and Sir Frank Cooper. He was a distinguished public servant as well as holding extremely responsible positions in private industry. He summed up my view. He said,
"Let me say that I am not an opponent of privatisation as a knee jerk reaction. The same applied to moving work out of Government. But I am quite clear that each case must be looked at on its merits…to privatise RAS, particularly on the inadequate grounds put forward is a bridge too far".
That is my view. I am not opposed to privatisation. There are cases where it is justified and has been successful. The Lord Privy Seal said that his case was based on the fact that privatisation is being extensively copied throughout the world. I do not know of any countries which have privatised the recruitment of their civil service. Indeed, people in other countries and other governments have come to RAS for their expertise and advice in running their own civil service recruitment services. I hate the idea that one applies privatisation as a dogma to everything: that is irresponsible government.
When privatisation takes place, whether it is British Rail or any other industry, one generally produces a prospectus and says, "All right, it will be done. The Treasury will receive so much and there will be a benefit to the nation to this or that extent". There is no evidence in the Government's submission which provides any clear-cut indication that there will be a return to the Treasury or that the service will necessarily be more efficient. Indeed, the noble Earl, Lord Howe, when we discussed this matter on an earlier occasion, said that the RAS had a well-established reputation as a centre of excellence. Yet the Minister sits here today, telling us that the RAS has a reputation for being a centre of excellence, but that we are going to privatise it and change it anyway.
The noble Lord, Lord Marlesford—he is not now in his place—made reference to the firms who may be appointed to take over the RAS. I have a Dun & Bradstreet report on the three companies who appear on the shortlist for the candidates who will run what is our Civil Service centre of excellence. One of them is engaged primarily, as described in the report, as a health practitioner. It may have something to say in terms of recruitment of civil servants; I do not know. However, it is described as being a health practitioner. It may have something to say because it also dabbles in psychology.
A second company is called Capita Group plc. That company was formed to take advantage of privatisation. It was appointed in various fields in which it has expertise. It is doing remarkable business as contractor to local government in chasing up people who have not paid their poll tax. It is engaged in privatising the testing of new motorcar licence applicants. It is engaged in privatising waste product disposal. That is one of the three firms to be considered for taking over the RAS and its sophisticated and excellent services.
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Similarly, the other company shortlisted is described as publishers and public relations officers with no expertise whatever in the field of recruitment assessment and training. I suggest therefore that it is a scandal that we are about to dispose of a business with a record of excellence in order to consider those kinds of companies to take over and run the recruitment services. I suggest that the Government think again. That is all we ask them to do.
It is interesting—I know that the noble Baroness, Lady O'Cathain, has a great deal of knowledge in this field—that no major international or national organisation with substantial experience in this field has applied for the job.
Baroness O'Cathain: My Lords, I am grateful to the noble Lord for giving way. As I said in my speech, I have direct working knowledge of one of those three companies and I do not recognise, from the descriptions the noble Lord gave, the activities of that specific company. The company involved was employed by the organisation of which I was a managing director many years ago to become involved in psychometric testing. It has a huge client base from doing psychometric testing for this type of recruitment. I know that it publishes definitive works on psychometric testing and recruitment and if it is describing itself as publishers and PR officers, I do not know where the PR comes in. It may be that it does work for PR firms also. However, unless the company has changed dramatically over the past few years, I am most surprised by the noble Lord's description.
Lord Taylor of Gryfe: My Lords, I am sorry if the noble Baroness believes that I am misrepresenting. I have been quoting from Dun & Bradstreet' s report on the companies concerned. I shall be happy to make that available to the Baroness after the debate. Because of the doubts that have been raised and the very strong, unanimous recommendation made by a committee of this House, all we are asking for is time to consider this matter. Cannot the Government just delay this matter? What is the hurry in the last days of a dying government? Can we have time to consider the very important matter of the Civil Service of this country, which is the envy of many countries in the world? I beg the Government so to do.
1 p.m.
Lord Cuckney: My Lords, I should like, as a member of the Public Service Select Committee, to thank our noble and learned chairman, Lord Slynn of Hadley, for his very skilful navigation through difficult and sometimes choppy waters. The report emphasised—and it has been emphasised again this morning—that the committee had severe time constraints in tackling a difficult and complex task. It was difficult and complex not because of the size of the Recruitment and Assessment Service but because of the qualitative issues involved. One result of the time pressures was that, in effect, we had to put the cart before the horse. We had to consider recruitment and how it should be undertaken, for a service that we had yet to examine: a service which has undergone dramatic and major change

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over the past few years, the impact and implications of which we were denied the opportunity of studying carefully.
I believe that we were unable fully to take account of the huge structural and, more important, cultural changes which have occurred in the Civil Service. Had we been able to do so I believe that we might perhaps have been more clearly able to recognise the changed and limited role that RAS now plays.
I shall be very brief this morning, but should like to underline the point that we had perforce to make a study and come to conclusions under time pressures which, I believe, are uncharacteristic of a Select Committee of this House. Inevitably, we conducted a rushed study of the actual role of RAS in today's dramatically changed Civil Service. In making these remarks I wish to assure your Lordships that this was a unanimous report and that I was honoured to be a member of the committee.
1.3 p.m.
Lord Rodgers of Quarry Bank: My Lords, this is an unequivocal report. I believe that noble Lords who are not with us today should read it. The concluding paragraph 88 is clear enough, but the preceding paragraph 87 is, if anything, stronger. I endorse everything said today by the noble and learned Lord, Lord Slynn of Hadley. He made a very plain statement. I also thank him for the great skill and patience with which he chaired the committee. As the noble Lord, Lord Cuckney, has just reminded your Lordships, this is a unanimous report. That does not mean that individual members of the committee were not obliged from time to time to accept a compromise, to recognise the need for concession in order to produce a unanimous report. Nevertheless, on the evidence before us—and others apart from those who gave evidence had the opportunity to do so—we came to a conclusion which is clear and spelt out in detail in this report.
I join in welcoming the maiden speech of the noble Lord, Lord Gillmore of Thamesfield, not only for the speech that he made, but also for his contributions in committee. It is unusual for a Member of your Lordships' House to be as active as the noble Lord was in committee before he had actually spoken in this place. He was an invaluable member and all that he said today was reflected in his remarks in our discussions.
It is very important indeed to recognise, as he did, that the idea of public service is a very real one. He mentioned the qualities of integrity, loyalty, impartiality and fairness. Although Mr. Michael Heseltine was remarkably insensitive to those considerations and failed to understand that the motives of other people in their life and work might be different from his own, I believe that the idea of a public service ethic is real to very many people and something which we should seek to preserve.
Mr. Heseltine said that there is merit in
"the interchange of public and private sectors".
Of course, the Civil Service has needed, and may still need today, more specialists. I believe that, by common consent, a greater degree of numeracy is also something
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from which the Civil Service has benefited. I do not doubt either and none of us could—this is another point made by the Deputy Prime Minister in his evidence—the dedication of many professionals. Nevertheless, there are those who joined the Civil Service because it was the Civil Service. They wanted to serve the public interest and they believed that this was the best way of doing so. I greatly regret that a number of men and women in that category will now find themselves transferred to the private sector with little or no choice about whether that should happen.
Other noble Lords have referred to the evidence given and remarks made by members of Her Majesty's Government in trying to persuade the committee at one stage that its purpose had not, and could never had been, achieved, but that there was still scope for account to be taken of what your Lordships' committee might say.
I remind the House of the precise words of the noble Viscount the Lord Privy Seal. He said,
[The] "final decision need not and will not be taken until the Select Committee … reports".
tbemphasise the word "decision". My understanding at that time was that the final decision was whether privatisation should go ahead. At least, the noble Viscount was emollient and helpful. The Chancellor of the Duchy of Lancaster said that the observations of the committee would be taken into account and carefully considered. Here again, I believe that he was conciliatory if not as positive as the Lord Privy Seal. However, I say with reluctance that the Deputy Prime Minister gave a performance which was cavalier, dogmatic and contemptuous. He gave the impression that he was wasting his own time in giving evidence before the committee and that it should recognise that we were wasting ours. He said,
"We have taken a decision. We intend to proceed. We have made up our minds".
Those are the precise words he used in presenting evidence to your Lordships' committee.
We were left not with questions of policy, but only of the process. Here again, I refer your Lordships to Questions Nos. 501 to 504, printed in the evidence with this report. In one case I asked,
"What are the matters still to be settled?"
It was a civil servant, Mrs. Margaret Bloom, who accompanied the Deputy Prime Minister, who said,
"Shall I take you briefly through the process?'.
I made it clear that it was not the process that the committee was concerned with but the policy. Mr. Heseltine then said,
"At the moment the procedure is advancing and I am not aware of hurdles which would be difficult to jump".
That is a classic example of "word-speak". It could have come from "Yes, Minister". It meant that he was paying no attention at all to the questions put by the committee and had no adequate reply to give. Finally, when asked whether there were any remaining policy issues, the reply that came from Mrs. Bloom was "No". So, when your Lordships' Select Committee was first convened and considered how to proceed under its terms of reference, there were no policy issues left to decide and there was never an opportunity for the committee to influence policy.

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If there was anything more depressing than the futility of the course upon which we embarked, it was the dogmatic and cavalier way in which the decision had apparently been made. We referred to that in the penultimate paragraph of the report, paragraph 87. The Chancellor of the Duchy of Lancaster explained in his own words why the decision had been made. He said:
"You might say, unkindly, that that is dogma".
He was fetchingly honest and I would not complain about that, but dogma it was. As Mr. Heseltine confirmed, it was dogma in his case also when, finding himself Deputy Prime Minister barely more than a year ago, he came into office and looked around for things to do. On his own account, he consulted no one. He made a personal decision in favour of privatisation—and that was that. Nothing said by the Deputy Prime Minister suggested any reference to Cabinet. Indeed, it was unlikely that the Cabinet was meeting at the time that that decision was made, according to his own account. There was no reference either to whether the matter was put to the Prime Minister. I shall be interested to see whether the Minister can confirm when he replies whether Mr. Heseltine made the decision alone (as in the terms of his own evidence) or whether there was a Cabinet decision or any reference to No. 10.
As other noble Lords have said, this has been a profoundly wrong decision. The Civil Service is not the property of any one government. In any case, it is quite wrong that privatisation should take place in the dying months of the Government. A commitment to this privatisation did not occur after 1979; nor after 1983; nor after 1987; nor after 1992—all general elections which provided the Government with the necessary majority. It is only now, after 17 years in government, on the eve of an election, that a decision has been made. Such an arbitrary and impudent decision brings the whole system of government into disrepute. In October it will all be over. There will be no national campaign to save the Recruitment and Assessment Services. There will be relatively few letters to Members of Parliament. The RAS will go out not with a bang, but with a whimper—but no good will come of it.
1.13 p.m.
Baroness Park of Monmouth: My Lords, I fear that I shall be plunging some hat-pins into my noble friend the Minister and I hope that he will understand that they are not directed at him. They arise from my deep concern for the future of the public service as a national issue.
If I were the Principal of Somerville today and an undergraduate came to me to ask for advice on how to enter the public service, I would have to advise not the CSSB procedure, but an early application to KPMG, Coopers and Lybrand, McKinseys, NatWest Markets, Price Waterhouse or some other city consultancy firm, for it is they who decide what will happen in the Civil Service and the BBC—or to the homes of our soldiers. National policy appears to be made by consultants today.
In preparing for this debate I have taken time to read the Civil Service White Paper of 1994, Continuity and Change—only the latter word is applicable—the July
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1996 paper Development and Training in the Civil Service; the 1996 reports of the Cabinet Office, the Privy Council and several other departments; the framework document of the Ordnance Survey, an executive agency, and of course the RAS 1994–95 report. They are all splendidly and expensively glossy, and full of soundbites signifying nothing.
Perhaps I may quote just a few of the dazzlingly empty and vacuous programme titles, taken straight from the marketing brochure of some third-rate advertising campaign to sell Mars bars: Competing for Quality; Trading Funds; Private Finance Initiatives; Next Steps Agencies (including the Buying Agency); Competence Frameworks; the Management Charter Initiative (MCI) which has spawned charters by the dozen—add to that the fact that every single White Paper, framework document or review is packed full of paragraphs about trading methods, customers, markets—even a perfectly normal group of Civil Service departments with an interest in recruitment has to be called a "consumer consortium"— efficiency scrutinies, performance reviews, and deregulation strategic plans. I cannot help wondering when the Civil Service is actually allowed the time to do its real job of running the public service. Small wonder that the Efficiency Unit in the Cabinet Office has as one of its main tasks for 1997,
"to continue to tackle the burden of paperwork in the public service"-
and how is it to do that?—
"with further scrutinies to be launched".
I read the admirable report of the Select Committee with mounting dismay because it bears out all of our earlier forebodings. The Government said as recently as July 1994 in the White Paper, Continuity and Change,
"The Government recognises that the Civil Service is not the property of any administration"—
that is a direct quote—but then, as the Deputy Prime Minister made so starkly clear to the committee, he does not read the papers which we so naively suppose to represent policy. He makes up his own mind and feels in no way bound by earlier ministerial commitments. How like our own dear John Birt at the BBC!
It is clear that the Government are hell-bent on privatising every inch of government that they can—not just creating Next Steps agencies, for some of which there are indeed perfectly sound arguments, but turning the whole public service into a series of small businesses. In the case before us, there has been no pretence of giving the staff (who joined the Civil Service because they chose to be public servants with all the responsibility and relatively small financial reward that it offered) the opportunity to continue to be public servants, however limited the range of the Civil Service, which is now so truncated, has become. The staff wanted to be public servants elsewhere in some other department. That was their chosen career. No, they are the intellectual property; they are the invaluable resource which is being sold—and it has been made plain to them that they must stay with RAS. It is, of course, probable that in a Civil Service which has been dramatically "down-sized", to use the jargon, there are fewer jobs available anyway, but that does not alter the

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arrogant disregard of their wishes and interests which the Government have displayed—and this is the Government whose main programme at present, as set out in the July 1996 paper, Development and Training for Civil Servants is the new soundbite programme "Investors in People".
This Government are staggeringly incompetent at man management—the same absolute failure to consult the people who are the Civil Service's most valuable asset, the same disregard of their basic rights (the staff of RAS are still waiting for answers to basic questions about their terms and conditions of service in the private sector to which they have been arbitrarily consigned), was displayed in the mockery of consultation employed in the married quarters estate plans. John Birt has had good models to imitate. I had always thought that man management was one of the cardinal features of any successful enterprise. The present Government's ideas seem to be confined to managing money, and money alone, coupled with some glossy brochures the texts of which consist largely of slogans.
The truly amazing fact which has emerged from the report is that while claiming to base their approach on sound business methods—and, of course, they are selling RAS as a single viable business—the Government have ignored all the facts that a business assessment would recognise: that RAS is highly successful; that major businesses would never dream of putting their recruitment out to external bodies; and that such businesses recognise that it is the insiders who are familiar with their ethos who will best "sell" it to the recruits. The Government of course at least recognise that—and that is why they will not allow RAS staff to transfer. But what of the day when the staff either move off to other private work, or retire? Where then will be the insiders' knowledge?
The Government have never been able, of course, to understand that potential recruits make an early judgment based on the insiders whom they meet (that is why the Army cannot make good a severe shortfall in recruiting, because it has been using the Jobcentres—a brilliant wheeze invented by the Treasury to save money by closing regimental recruiting centres). That of course is a mistake which has now been corrected.
Another interesting fact that has emerged is that the Government count on careful monitoring by the OPS to ensure that standards are maintained, but were quite unable, eight months after deciding to privatise, and with the contracts about to be negotiated, to say how much the monitoring will cost. That of course has been set straight today by the statement of my noble friend the Lord Privy Seal about the three posts which will be created. It is, nevertheless, very late in the day.
It is ominous that monitoring units in the DSS have been cut. Perhaps that is what Mr. Heseltine meant when he said that he wanted to bring numeracy into the public sector as opposed to literacy, but I suspect that the real reason is that the cost might prove a significant argument against the wholly unnecessary move from an agency to privatisation. No one should of course be surprised that he has bluntly said that his aim is to change the culture of the Civil Service, nor that he has
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made his decision, and does not intend to be confused by the facts, still less indulge in consultation. Yet there is hardly one word raised in the whole volume of evidence which is not against the privatisation of this priceless resource. Among the many who gave evidence to that effect were 40 CSSB assessors.
It has been said, too, that no other government would dream of putting public recruitment in private hands. Consider that the new business would only have to hire one possibly quite minor member of staff with access to records, who had an IRA connection, or who was open to exploitation by a foreign intelligence service, to constitute a serious long-term threat. It is not a question of who does positive vetting, it is a question of access to records. Businesses do not expect to put elaborate security measures in place, nor are they trained in security thinking.
But, I come back to the central point—the recruitment of those who are to implement our national policies is not a business, it is a part of public service. The fragmentation and near dismemberment of the public service is what faces us, and it is being done in the name of dogma. The Government said in the 1994 White Paper that it:
"does not envisage extending the formal establishment of agencies into areas of the Civil Service primarily concerned with policy".
That is an easy commitment to abandon: it is all a question of—what is policy? Anything expensive which can be successfully sold as a going concern will prove to be, miraculously, operational or purely executive—anything but an aspect of policy. It is easy if you know how.
I come back to the Houdini-like ability of Ministers to create charters, invest in people, and advocate better management (which for them means solely business plus, trading initiatives, and private finance initiatives, to get other people to pay) while destroying the major resource they and the country have: the people in the Civil Service who joined to be public servants, not small businessmen. They have been sold short. Virtually, they have been betrayed.
I do not deny that the Civil Service, like any other large organisation, probably needs some reform, and certainly some departments, like the Treasury and the DES have led a very sheltered life, but, as Michael Bett himself said in his review of the Armed Forces manpower, Managing people in tomorrow's Armed Forces:
"We were puzzled as to why the Armed Forces should need an independent review … Few private sector organisations would ask their senior management to stand aside while an independent Committee examined their manpower, career and remuneration structures, and there are few precedents for such a review in the public sector".
But, of course, one forgets, there have been internal reviews and option papers. But do Ministers read them? They prefer either to use their advisory boards for independent advice, at least in the case of the agencies—boards which, according to the White Paper:
"Typically consist of a mixture of civil servants … and outsiders who bring business expertise or knowledge of the markets".

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Or of course some of them evidently prefer to act on instinct, or, as Mr. Heseltine observed, "happened to take a view", and there are always McKinseys which, as he also said:
"are inside most Government Departments most of the time and do not seem to have caused any great trouble".
That is a great relief.
Others will speak of the constitutional issues raised by the apparent power of one administration to fragment a great public institution, destroy morale, and change the culture. I can only say now that, although the most the committee has been able to do is to win some relatively cosmetic safeguards and concessions—exactly what happened in the case of the married quarters estate—it is quite vital that the committee proceed with its work so that in the next Session there can be full debate on the Floor of both Houses. It is not yet quite too late, but nearly so.
My concern is for the future. I wish the young still to be able to choose the public service and its ethos which is a noble one. I fervently hope that no further major privatisations will be allowed to go forward before consultation and debate.
1.26 p.m.
Lord Chorley: My Lords, considering the circumstances in which the Select Committee sat, and the provocative nature of much of the Government's evidence, the document we have been discussing today is remarkable for its restraint. Nevertheless, it must surely be one of the most devastating documents to emerge from a Select Committee of your Lordships' House in recent years. It is comprehensive, mercifully short, clear and lucid. We all echo the thanks of other noble Lords to the noble and learned Lord, Lord Slynn of Hadley, and his committee.
My interest in the matter of the RAS stems in large measure from being a member, through most of the 1980s, of the TSRB which frequently took evidence about recruitment into the fast stream from the Civil Service Commission. Many years earlier I was seconded into the Civil Service for two immensely stimulating years, and, generally, in a professional capacity I have worked for, or alongside, or had occasion to consult senior civil servants. Over the years I have come to respect, albeit sometimes rather critically, the quality of our Civil Service. I am speaking of course of the senior echelons, because it is there that I have had most of my dealings.
Coming, as I do, from a City background, what has most struck me about the Civil Service is the ethos of public service and the collegiate camaraderie which have been referred to so eloquently by my noble friend—indeed I might say my old friend—Lord Gillmore, in his memorable maiden speech. That was its strength, and it is a very precious asset. Once destroyed, it would be extraordinarily difficult to recapture. That is what successive administrations seem almost systematically to have been bent on doing over the past 17 years.
That asset depends upon three main factors: first, a general regard, particularly among parliamentarians, for the integrity and quality of our civil servants. Instead of that, what we have experienced is a miasma of
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disparagement over those years. The second is adequacy of remuneration. Here, too, over those years, there has been a progressive deterioration which is not confined to the Civil Service. I am thinking of course in terms of pay comparisons with the private sector, but the comparisons I have in mind are not those with the fat cats, they are of the normal levels of middle management, and there the disparity has been getting bigger and bigger, and it is not satisfactory. Thirdly, the integrity and quality of the recruitment process which the RAS and its predecessor set up are an integral part of the asset. Now, too, that is threatened in a most naked way. The report spells it all out.
The issue in my view is not just one of privatisation versus nationalisation. I have always supported, and indeed have been professionally involved in, the privatisations. The issue for the RAS, as other noble Lords have said, which, in any case, is the smallest minnow in economic terms, is far more fundamental. We are not talking about how best to make or supply widgets, units of electricity, water, steel, telecommunications, or whatever, I believe that the issue has more to do with the role played by the Civil Service in the integrity of the functioning of constitutional government.
Yet to read the evidence, especially the oral evidence of Ministers, one would believe that the RAS was just another boring old business of supplying widgets. The evidence positively reeks of this dismissive attitude. It reeks of an ideological attitude, a crude ideological fixation, whose only parallel in my book is that of an unreconstructed socialist. That was about the most pejorative term that I could think of.
But that is not all. There is, too, the way in which the process has been conducted, about which we have heard a great deal. I refer also the manner of its announcement. Apparently, it was so trivial an issue that it merited only a parliamentary Written Answer and, at that, only part of an Answer. There was no White Paper, no Green Paper and no consultation. In particular, there was no thought for the staff involved. I refer to the brave but damning letter on page 92 from Mr. Barry Hilton, the Chairman of the Staff Representation Group. There was also the awkward position of Mr. Dennis Trevelyan, the then Civil Service Commissioner. Page 21 reads:
"Mr. Trevelyan told the Committee that he had been authorised by Ministers to say to RAS staff when the Agency was set up in 1989 that it was not the first step in a privatisation exercise".
There was then, too, the fact, according to the report, that the whole exercise had not been properly costed. We have heard more about that today and I am still not clear that the exercise is economically worth while, leaving aside the wider issues. There is no evidence that the sale represents good value for money.
Then there is the sale agreement, which one cannot see because it is not yet finalised. But we can learn enough from the report to infer that it will provide a field day for bureaucrats and lawyers at the taxpayers' expense. We read that the Crown will licence the intellectual property rights of the RAS. But those property rights will change and merge and will become entangled with the buyers' intellectual property rights. However, listening to the noble Lord, Lord Taylor of Gryfe, it does not sound as though they will have many

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intellectual property rights to contribute. But, assuming that they do, those intellectual property rights will merge with the RAS rights as the years go by. So how on earth will the Government exercise their intellectual property rights, and to what end? It strikes me as being a right old muddle.
Indeed, the notion that one can regulate by contract the intricate kind of relationships with a whole host of individual government departments which the report outlines I find breathtakingly naive. I know because I had a little experience of that in an attempt to set up a trading fund. I thought that the whole thing was farcical.
All that is set out in some detail in the report and the evidence. Its conclusions are clear and devastating. It is difficult to find a single point in favour of the proposal. Finally, we are left with the other major issue to which reference has been made; that is the attitude of the Government to the Select Committee and, through it, to this House. I am thinking particularly of the evidence of the Deputy Prime Minister, which has been referred to by almost every speaker today, and the interchange quoted in the report at paragraph 10. I think also of his final interchange on the same point with the noble Lord, Lord Merlyn-Rees. I do not know whether I am using unparliamentary language—other noble Lords have done so already—when I say that I found this breathtakingly arrogant. Indeed, the whole of his evidence was arrogant and dismissive.
Where do we go from here? It was my understanding that the Government would withdraw the proposal only if the report was a show-stopper. It is hard to think of a report which could be more of a show-stopper. I beg the Government to think again.
1.34 p.m.
Lord Beloff: My Lords, I should like to begin by doing what has become fashionable in your Lordships' House and declaring an interest. It is not the same interest as has marked some of the previous speakers. I have never been a civil servant. I have never acted as an assessor in any of the competitions to which reference has been made. My interest is a different one. For 11 years I was a reader in the comparative study of institutions in the University of Oxford and for 17 years Gladstone Professor of Government and Public Administration. One of my principal duties was to instruct the young students not only from the United Kingdom but from many parts of the world in the principles and practices of the British Constitution. At times that naturally impinged upon the conduct, composition and ethos of the Civil Service. Indeed, for some years, with the assistance and help of the late Lord Armstrong of Sanderstead, then the permanent head of the Civil Service, a number of distinguished people from Whitehall, many of them subsequently to reach the headships of departments, came down and talked to my students. At the same time, I was involved in doing something similar in what was then called the Centre for Administrative Studies, which was the origin of what is now the Civil Service College. I feel a certain commitment to the constitution as I taught it and as I had learnt about it from my predecessors.
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Of course, it must be admitted that not all students benefit from the instruction which is open to them. Noble Lords may have read in this morning's Times a letter from Winston Churchill to his son Randolph upbraiding him for not taking advantage of the intellectual atmosphere of Oxford.
Having read the admirable report of the committee, I believe that in that category of those who have not taken advantage of what has been open to them must be the Deputy Prime Minister. Other noble Lords referred to the arrogance with which he dismissed the concerns of your Lordships' committee. Indeed, it is most marked. By comparison with the Deputy Prime Minister, Louis XIV of "L'etat c'est moi" turns out to be quite a modest little figure.
But I am not so much worried about arrogance because I believe that we can survive arrogance. What we cannot survive is ignorance. What was clear from the evidence of the Deputy Prime Minister, and to a lesser extent the evidence of the Chancellor of the Duchy of Lancaster, was that they had not appreciated the fact that this is not a matter of efficiency.
With apologies to the noble Baroness, Lady O'Cathain, all that she said about British Airways and psychological tests in the private sector have nothing whatever to do with the issue before us. We are considering a major constitutional issue, which was referred to by the noble Lord, Lord Gillmore of Thamesfield. We are considering the changes which were made in the nature of British government in the 1850s which have been the basis of our constitutional system ever since. We are talking about the detachment of the Civil Service from political and other forms of patronage and a clear demarcation between the public and the private sectors. Noble Lords with an interest in things military, like my noble friend Lady Park, who has just delighted us, as always, will remember at the same time the abolition of the right to purchase commissions, which was one of the foundations of our modern professional army.
That is not to cast any doubt or aspersions on the private sector. At the same time as those reforms were taking place in the public sector, British capitalism was in one of its most expansive and innovative phases. The two can and should go together, but there must be a clear separation.
That is not only a principle of the constitution which we have always thought was applied to our own form of government. Where we have had the opportunity in the rest of the world to suggest, or, indeed, in the case of imperial possessions, to introduce systems of government, we have emphasised precisely the same point about an independent non-political Civil Service removed from the market place. Those who have a particular interest in India will agree that one of the reasons that the Indian Republic has, after 50 years of considerable troubles, managed to retain a democratic system, which is not common in third world countries, has been because it inherited from the Raj the steel framework of the old ICS.
This is a very serious issue. It is extraordinary to think that any government of any political persuasion should wish to tamper with this matter, whatever other reforms

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they may think are necessary for the public service. I must confess that I was worried about a tendency to obliterate the distinction between the public and private sectors before the question of the RAS arose. I was worried and to some extent I am still worried about the opening to competition of some of the higher posts in the public service. That is not because there may not on occasion be something specific to be gained by recruiting someone whose previous experience has been elsewhere, as in the case of our maiden speaker, although that was rather earlier in his career. It is because one of the characteristics of our civil servants and the reason why they have been able to devote themselves to this service of government and, through government, to the public, has been that they had laudable ambition within the service. Anything which means that there are fewer posts to which a young civil servant can aspire must, to some extent, damage his commitment and morale. I return again to the military in the presence of my noble friend Lady Park. We are always told that one of the reasons for the high morale of Napoleon's armies was that every infantryman thought that he had a marshall's baton in his knapsack.
Therefore, before this matter arose there was some degree of fear of losing any feeling for the vital importance of what one might call the Northcote-Trevelyan tradition. However, when we come to the present suggestion, which is so outrageous that nothing has been found by the committee from any of its witnesses which gives any credibility to that proposal, one begins to wonder what on earth has gone wrong. How is it possible for a British Government to say that, despite the safeguards, they are prepared to risk surrendering what is such an important part of the duty of every civilised government; namely, the recruitment of young people to the service of the state? How could any government think that that was a sensible step to take? They may privatise as they like but to privatise this core element of government is like privatising the Grenadier Guards. That is the nearest comparison that I can think of.
After all, we do not have to look very far to see what happens in countries where there has been a blurring of the public and private interest. There are a number of European countries at present, our partners as some people call them, whose politics are vitally affected by various scandals—Italy, France and Belgium. All those derive ultimately from people confusing what is proper in a private citizen with what is proper in a servant of the public.
Therefore, like other noble Lords, I still cherish the hope that this will turn out to be a nightmare; that the Government cannot possibly intend to do what they say they intend to do.
Although this debate has been largely lacking in party references, I should like to finish my speech with a party reference. It is the wish of the Prime Minister, repeated on several occasions, that one of the planks on which he will seek re-election in the next general election is the defence of the British constitution. I ask my noble friend the Minister to pass on to his right honourable friend the Prime Minister this thought: if you defend the British constitution, you cannot pick and choose. The
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Northcote-Trevelyan principle of the independence of the Civil Service is as important as the Monarchy, the Act of Union and the constitutional position of this House. If the Prime Minister is to fulfil his wish of presenting the country with the defence of the British constitution, he must tell his deputy to come off it.
1.47 p.m.
Lord Wallace of Saltaire: My Lords, as a former student of the Gladstone Professor of Government and Public Administration, now the noble Lord, Lord Beloff, I was slightly nervous when he referred to the fact that not all students benefit from instruction. I feared that he might be looking too closely in my direction. But I am happy that on this occasion, I agree very strongly with everything that he has just said as, indeed, many of my own views on the British constitution derive from his teaching of many years ago and from the Liberal and Conservative sources which he and others made me read.
This House now needs to think very carefully, and the Government Front Bench need to think very carefully, about the position that we have now reached. In an extremely powerful speech made by the noble Lord, Lord Chorley, from the Cross-Benches, we were told that this is one of the most devastating reports presented to this House for many years; that we are facing a threat to the integrity of constitutional government.
It is also a threat to the role of the position of this House. When I joined this House, I understood that was joining a revising Chamber, a House which requires to be persuaded; which has the authority to ask the Government to think again and to delay while they do so; and above all, which requires the Government to justify the proposals which they lay before Parliament. I remember always that phrase from the Declaration of Independence, that a democratic government must have a decent respect for the opinions of man. That is what this House is about. That is the constitution of a House which the Government tell us they wish to defend in its present form in the next election. If the Government go ahead, we are faced, effectively, with a contempt of this House and also, I venture to suggest, a contempt for British democracy in that a Government who have not yet produced arguments for this privatisation which can persuade a substantial proportion of the Members of either House of Parliament unwhipped still insist on going ahead.
I also believe that that raises very worrying considerations for the Conservative Party. What we see here is the abandonment of the Conservative Party's own principles and traditions to go awhoring after the strange gods of American libertarian anarchism, with the belief that government is at best a necessary evil and markets the only basis for morality. I remember the extraordinary speech made by the current Secretary of State for Defence, Mr. Portillo, in Barcelona some 18 months ago when he talked about the state as a threat and markets as a defence against the state. It seems to me that that is the position into which we are slipping: Portillo instead of Patten, Gingrich instead of Burke—people who follow Public Interest and National Review,

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not the Daily Telegraph and The Spectator; the capture of the Conservative Party here by a small group of American ideologues, just as on the European issues it has been captured by a small group of xenophobes.
On Tuesday the Leader of the House differed with me on the views of his distinguished great grandfather on the British Constitution. Yesterday I spent some time going through the four volumes of Lady Gwendoline Cecil's Life of Salisbury trying to find out what his constitutional doctrines were. I have to tell the House that he was an utter pragmatist; indeed, he had no constitutional doctrines whatever. However, I did discover the publication of Lord Hugh Cecil of 1912 entitled Conservatism. I quote from Chapter 6:
"Modern Conservatism inherits the traditions of Toryism which are favourable to the activity and the authority of the state … Both the central government and the local power of squire and parson were in earlier times inclined to what we should now call 'paternal government'; and had no sympathy with the unrestricted working of competition or the principle of laissez-faire … And in the 19th century it was among Conservatives that the authority in control of the State was defended and in some cases enlarged and strengthened".
After all, we are talking about an idea which comes down from Burke; namely, that government is a trust which is inherited from our predecessors to be passed on to our successors. I quote Edmund Burke, who warns against the greatest danger to the constitution:
"lest the temporary possessors and life renters in it, unmindful of what they have received from their ancestors and of what is due to their posterity, should act as if they were the entire masters".
I was using my volume on the Conservative tradition fairly thoroughly last night. Benjamin Disraeli goes on to say:
"The great question is … whether change should be carried out in deference to the manners, the customs, the laws, the traditions of the people, or in deference to abstract principles and arbitrary and general doctrines".
Here we have change pushed through in pursuit of an arbitrary and general doctrine, without any consideration for the manners, the customs and the traditions of the state—the idea that the Crown is more than the Government; the idea that civil servants are, indeed, servants of the Crown and not just of the government in power.
Therefore, I checked in the most recent book that I could find on modern conservatism by someone called David Willetts, who is not without influence in the current Government. He says that:
"Our central constitutional principle [is] the sovereignty of the Monarch in Parliament";
not of the Government, but of the Crown in Parliament. He says that it is:
"a conservative view which would both respect the constitutional traditions which have brought us thus far, and would also recognise that they may change further in ways which we cannot now guess".
I admit that I have been persuaded over the years of the case for administrative reform, even for what some would call "the reinvention of government". Some aspects of public administration are clearly better supplied by the private sector than by the over-expanded, overloaded government system of the
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1960s and the 1970s. But I know of no one outside the Government who thinks that this is a worthwhile part of privatisation as such.
I was having a long seminar over supper last night with an old acquaintance who is now advising the Government on resource accounting, and so on. He took me through part of my introductory lecture as regards the principles of resource accounting, the private finance initiative, customer-provider relations in the NHS and road pricing and he even argued the case for the sale and leaseback of the Treasury. But when we came to consider the Recruitment and Assessment Services, he said, "That's absurd. It is just an expression of Michael Heseltine's machismo".
What we are looking at is the dismantling of a core element of the Civil Service. As several speakers have said, we are also looking at the denial of a public service ethos. I note how that spreads around the Government Front Bench. Indeed, on Monday last during Question Time, the noble Lord, Lord Mackay of Ardbrecknish, said that private enterprise had a lot going for it that state suppliers do not have and that one of the aspects was efficiency and effectiveness. The suggestion that it is impossible to have efficiency and effectiveness within the state administration is, I suggest, absurd, dogmatic and ideological; and, indeed, the Recruitment and Assessment Services is an example in the report of efficiency and effectiveness within the government service.
I find it extraordinary that those who are concerned about the defence of British sovereignty want, nevertheless, to sell off some key elements of the sovereign British state. Ministers seem to take great pride in how much government property they have sold off to Japanese companies, among others. Sometimes the same people who conjure up the enormity of the German threat to take control of Britain's currency are entirely happy for the Japanese to take control of other parts of the fabric of the British state.
We have talked a little today about the question of costs and benefits of the proposed privatisation. As I understand it, the RAS is a centre of excellence currently producing a surplus of between £300,000 and £400,000 a year. That surplus may either be returned to the Treasury or to customer departments, to use the jargon, to reduce their recruitment costs. Under privatisation we must, I suppose, assume that that surplus will become the contractor's private profit, as virtually all the expected efficiency gains are reported now to have been made.
Meanwhile, we see extra costs to the Office of Public Service and the Civil Service as a whole: first, as the Leader of the House told us, as regards extra staff in the OPS; and, secondly, for Whitehall monitoring of the contractor. As I understand it, the draft contract is 100 pages long and any variation in it would have to be approved by a 13-member Whitehall committee. Then, of course, civil servants would have to continue to help the contractor as we have built in this very complex process. We are not told whether they would help the contractor for free or whether their time would be charged out at full cost to the private contractor.

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That takes us to the whole question of the relationship between the private monopoly contractor and the Government; namely, the question of patronage and the risks of corruption in such a relationship. That was why Edmund Burke in the Government of 1793x2013;94 proposed the setting up of the Queen's Printer and Her Majesty's Stationery Office. It was precisely to get away from the buying influence and the potential corrupt practices that such a relationship involved—the links between private contractors and government, with all the payments in those days to Ministers themselves (though now, of course, to the governing party or to government MPs) in return for favours received. We have already seen a dangerous blurring of the proper distinction between the state and national interests and private advantage in the sphere of arms exports in recent years. The question of whether private interests would come in to that sort of relationship with the state is one that was posed by the secretary of the First Division Association in her evidence to the committee.
I do not know whether any of the companies involved in the current round of privatisations have contributed funds to the Conservative Party. But I know that it would be improper for any company holding such a supply contract to contribute to the funds of the Conservative Party. If this goes ahead, I shall put a Question down in the autumn to ask that the contract—which has ended up at 101 pages—should include the condition that whoever takes it will be debarred from contributing to any political party.
I now turn to the role of the Deputy Prime Minister. Michael Heseltine is now emerging as the Wedgwood Benn of the current Government. I was not a member of the committee and I did not attend any of its sessions. However, I was impressed by the remarks of the noble Baroness, Lady O'Cathain, on the conduct and behaviour of the Deputy Prime Minister before the committee. That seems to me to come close to a contempt of this House. I appeal to members on the Government Bench to represent the interests of this House within the Government in calling on the Deputy Prime Minister to think again and to make sure that these decisions represent the interests of the Government and, dare one say, of the state as a whole, of the monarch and Parliament, and of the Crown, rather than simply of the Deputy Prime Minister. There is therefore an underlying constitutional issue.
As the noble Lord, Lord Beloff, has said, it is the Conservative Government's current intention to go to the country some time in the next nine months defending the present constitutional balance and even the present composition and functions of this House. Here we have in effect an attempt to dismantle part of the core of the British state, which undermines the entire Conservative case, as we shall argue as the election approaches. I thought my party would be arguing the case for constitutional reform. I find that we shall have to argue the case for constitutional renewal and for the restoration of British institutions and values against a Government who have forgotten them.
2.2 p.m.
Lord McIntosh of Haringey: My Lords, this has been an astonishing debate. The whole issue started with the utmost impropriety of being announced by way of a Written Answer. It continued with another astonishing debate on 8th March of this year in which all but one noble Lord, other than Ministers, attacked the Government for their proposals to privatise the Recruitment and Assessment Services. I hope that it is not now concluded, but it has proceeded towards a debate today in which every single speaker, other than the Ministers opening and closing the debate, have said that this proposal should not be proceeded with. The Lord Privy Seal used the word "show-stopper" in the House last month. If this is not a show-stopper, I do not know what is.
The debate began by speakers discussing whether there was any propriety in the proposals. On 8th March my noble friend Lord Callaghan of Cardiff magisterially said,
"the Civil Service is not the private property of temporary, fleeting Ministers to trifle with as they please. It is the property of us all, and Parliament has always accepted that"—[Official Report, 8/3/96; col. 546.]
Not only was it improper for the issue to be started in the way I have described but every single stage of the process has been improper. I refer to the lack of a Green Paper and a White Paper, and the lack of prior parliamentary debate. I refer to the lack of consultation with the consortium of customers of RAS and, above all, the lack of consultation with the staff of RAS. Those staff were not only not consulted but were formally debarred from giving evidence in person to the committee. There cannot be any question but that what is proposed, and the way it has been processed, is utterly improper.
Now I turn to the practicality of the issue. At an earlier stage Ministers were full of the supposed advantages of the privatisation of RAS. I notice that virtually all of those arguments have slid off into the sand and are hardly being repeated at all. Even the Lord Privy Seal, in what was, I assume, a deliberate attempt to make a boring speech—that is not easy for him because he is not naturally a boring person, but he was clearly trying to defuse debate by making as low key a speech as he could—did not repeat the arguments about the advantages for RAS of having new financial resources and access to capital. He spoke of none of that. None of that was found in the evidence of anyone to the Select Committee.
Therefore we have this afternoon a debate in which we have heard the support of two Conservative members of the committee for the unanimous recommendations of the committee, and the support—constrained by the natural requirement to be uncontroversial—of the noble Lord, Lord Gillmore, in his excellent maiden speech, to which I shall refer later. We have heard speeches of the utmost ferocity from normally mild people such as the noble Baroness, Lady Park, the noble Lord, Lord Beloff, and the noble Lord, Lord Chorley. The Lord Privy Seal will have an opportunity tomorrow to read the speeches that he missed. I understand why he had to miss them. He will note the ferocity of the speeches made by those

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on his Benches and by speakers such as the noble Lord, Lord Chorley, who are not sympathetic to my politics. It is difficult to see therefore how he could proceed unchecked with what is now proposed.
I turn to the committee itself. Let us forget the argument about time pressures. That committee did a good job. It was clearly well chaired and it was composed of Members of your Lordships' House who knew their mind and who knew the subject and were capable of making up their own minds. Some noble Lords said that the evidence was one-sided. It need not have been one-sided. If the Government had wanted to, they could have made sure that the point of view in favour of privatisation was put to the committee. There was no problem in achieving that if they had wished to do so. If the Government had wished, they could have ensured that other noble Lords from their own Benches supported privatisation. They have not done so. They have conspicuously failed to do so.
What we have to remember about the work of the committee is not that it acted in haste but that for defensible and understandable reasons it restricted its own terms of reference. In paragraph 66 it states specifically that it would not be concerned with the philosophical arguments for or against privatisation but would be concerned only with the effect on recruitment to the Civil Service. That is why we are now talking about the practicalities.
In his opening speech the noble Viscount the Lord Privy Seal referred to the detailed recommendations. He went through them in some detail. That was most helpful and we are grateful to him. But he did not recognise that the recommendations of the committee were put in the context of, "Don't do this, but if you have to do it these are the necessary precautions that you have to take"; and even there the noble Viscount the Lord Privy Seal did not answer all those questions or agree with the committee in all its recommendations.
Perhaps I may take only one example with which I am well familiar. It is the question of the possibility of transfer back to the Civil Service of staff under the terms of the Transfer of Undertakings (Protection of Employment) Regulations. The noble Viscount the Lord Privy Seal said that if TUPE applied those staff would be able to transfer back. At question 500 Mrs. Margaret Bloom made it clear that TUPE applies and that the staff will be able to transfer back.
All the assets of RAS are in its people. If they transfer back, there will be nothing left. I have a great deal of experience of training and enterprise councils whose staff were transferred from the Civil Service on the undertaking that after two years, if they wished, they could go back. At the two-year period which was spread over a period of time a large proportion of the staff went back and the work of the training and enterprise councils during that period was severely handicapped. Can we envisage the possibility that a significant number of RAS staff would go back to the Civil Service despite the fact that their exact jobs would no longer exist? What would happen to RAS and the functions that it performs for government? That is only one example.
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In his excellent maiden speech, the noble Lord, Lord Gillmore, spoke of the need to preserve the ethos of the Civil Service. I contrast that with the requirement by the Deputy Prime Minister to change the culture of the Civil Service. Let us consider the dictionary definitions of these words. "Ethos" is a characteristic spirit and beliefs, of community, people or a system. A "culture" is a particular form of intellectual development or civilisation. These are closely related terms. If the noble Lord, Lord Gillmore, is determined to preserve the ethos, as I believe we all are, we must be determined not to change the culture as the Deputy Prime Minister is determined to do.
I am sorry to have to say this, but Mr. Heseltine has humiliated the Chancellor of the Duchy of Lancaster and the noble Viscount the Lord Privy Seal. All of the undertakings they gave to the House and to the committee have been swept aside in one afternoon of evidence from Mr. Michael Heseltine. The noble Viscount the Lord Privy Seal would never have said this to the House. The Deputy Prime Minister said,
"We have taken a decision and we intend to proceed".
Will the noble Viscount the Lord Privy Seal now report back on this afternoon's proceedings to the Deputy Prime Minister and say, as he is required to do, I believe, "We are now in a position to move forward"?
In the diplomatic language necessary in committee reports, having said that there is no case for privatisation and that there are positive arguments for not going forward even given the philosophy of privatisation, the committee states in its final paragraph that the Government should reconsider their position. That did not mean that the Government should reconsider the details of the proposal. That meant, and could only mean, that the Government should abandon these proposals.
I come back to what the noble Viscount the Lord Privy Seal told us last month: that if the report of the committee were a show-stopper then the Government would have to take account of it. That report is a show-stopper. This debate is a show-stopper. The show should be stopped.
2.14 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, I have good reason to remember well the debate which took place in March on this matter in your Lordships' House and the expression of opinion given by the House on that occasion. I could hardly forget it. I have therefore read the report of the Select Committee and listened to today's debate with great interest. Perhaps I may add my thanks to the committee for the work that it did. It has been welcome and valuable in focusing the Government's attention on the areas of particular concern and allowing us to strengthen the arrangements we proposed in respect of them.
The Government's response to the report given earlier by my noble friend the Leader of the House and the considerable amount of detail that we have been able to give to the committee, both on the present operational role of RAS and on the sale arrangements, should have

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allayed many of the concerns and allowed a better understanding at least of why the Government believe that privatisation is in the best interests of the agency, its customers and the taxpayer.
However, I should be the last to obscure the fact that a number of important points have been made in the course of today's debate, both on the Government's response and on the privatisation more generally. I should like to answer them. The committee's central concern, reflected in the debate today, was standards of service. Noble Lords have questioned whether privatisation will really improve the service that RAS offers to its existing customers. The Government have made clear their belief that RAS will be better able to continue its development as a centre of excellence in recruitment and assessment, without the constraints that necessarily go with public sector status. A wider customer base, a range of private sector business management skills to complement those which RAS has developed as an agency and freedom to invest as opportunities arise—all those will benefit RAS in furthering the progress made since its launch in 1991.
The fast-stream schemes are prestigious. The new owner will wish to maintain them at the leading edge of graduate recruitment. We believe that the bidders we have short-listed will be well placed to achieve that and to continue to improve service delivery. In addition, the contracts and the "intelligent customer" arrangements will provide an improved framework for managing the scheme. So the Government believe that the sale will bring benefits for existing customers as well as better value for money.
One of the important recommendations in the report was that the level of resources devoted by the new owner to research should be controlled by the contract, such that any reduction would need the agreement of OPS and the commissioners. In our response, we noted that we agreed with the aim of that recommendation. My noble friend described the contractual requirements for the area and failure to meet them would place the new owners in breach. Again, however, they will have no wish to endanger RAS's reputation for top quality, leading edge work. We are confident from bidders' proposals that strong performance in that area will be a priority. We noted, too, that customers will wish to commission independent research to help them evaluate the success of the recruitment and assessment methods used for the fast stream.
The noble Lord, Lord Gillmore of Thamesfield, in his fine maiden speech and with the wisdom that I believe your Lordships would expect of him, referred to the need to retain that precious commodity: Civil Service ethos. As the noble Lord said, the report lays much stress on maintaining arrangements that are in keeping with the nature of the Civil Service and its work. The Government are entirely in sympathy with that aim. We have, of course, emphasised the continuing involvement of civil servants in selection decisions. There will be no change to the present arrangements in that respect. In addition, civil servants will continue to work in RAS on secondment after privatisation, helping to ensure, for example, that background exercises for the assessment centre stage properly reflect Civil Service work. It is a
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requirement that both the Civil Service selection board and the final selection board continue to be held close to Whitehall. Of course, customers who will retain responsibility for marketing the fast stream will continue to work closely with RAS to ensure that the scheme maintains its distinctive nature as a shop window for the Civil Service.
The Government have always stressed their absolute commitment to maintaining standards of integrity and impartiality which are rightly regarded as cornerstones of the Civil Service. I think it is worth stating again today that our proposals for the future of RAS will in no way undermine those standards. The principle of selection on merit by fair and open competition and the responsibilities for ensuring that this principle is adhered to in recruitment are not affected by the privatisation.
The noble Lord, Lord Jenkins of Hillhead, referred to the remarks of my right honourable friend the Deputy Prime Minister about changing the culture of the Civil Service. The noble Lord may ask: what is in a word? However, he did my right honourable friend less than justice in blurring an important distinction. My right honourable friend explained that the Government wished to broaden the culture of the Civil Service in order to encourage the interchange of the public and private sectors, to bring more specialists into direct management, to bring a greater degree of numeracy, as opposed to the excellence of the literacy of the public service. He was not speaking about ethos in the sense raised by the noble Lord, Lord Jenkins, and the noble Lord, Lord Gillmore, but about the culture. My right honourable friend also said that—
Lord Jenkins of Hillhead: My Lords, as the noble Earl will be aware, Mr. Michael Heseltine also gave us one of his primary reasons, to be precise his number three reason, for doing this; namely, to free the RAS from the constraint of the public sector ethos. So if I may say so, Mr. Michael Heseltine delivered a double whammy.
Earl Howe: My Lords, I have already referred to those constraints, and I have to say that I agree with my right honourable friend in the sentiments that he expressed, if not with the precise phraseology.
The central issue is that my right honourable friend said that he fully recognised the dedication of civil servants. He referred to "the best Civil Service in the world". That is an endorsement of my right honourable friend's view of the Civil Service; it is proof of it. He also said that he considered that the same dedication is to be found, for example, in the law, the accountancy profession, the Church, the teaching profession and so on. That was why I suggested respectfully to the noble Lord, Lord Jenkins, that he was seeking to blur a real conceptual distinction.
The noble Lord, Lord Chorley, said that in his view the integrity of the Civil Service recruitment process was threatened by the privatisation. The integrity of that recruitment has been very carefully considered during the preparation for privatisation by both customer

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departments and the Civil Service Commissioners. The Government are content that all the safeguards in place will ensure that that integrity continues to be protected.
But a further area of importance is the degree of consultation with departments before the decision to privatise was taken. Major departments were consulted on options for contracting out all or part, or none, of fast stream recruitment and on potential implications for general recruitment of privatising RAS. The conclusion of the consultation on the options for full or partial contracting out of fast stream recruitment was that all of the options would be technically feasible. A contract for the provision of the whole of the fast stream recruitment and selection process could be written which would give the fast stream customer sufficient control and flexibility to protect essential interests. On general recruitment, departments foresaw no problems in maintaining their role as good employers, nor would they expect to incur any additional costs—for example, the build-up of an internal intelligent customer capability—as a result of privatisation of RAS. Ministers were advised of the views of departments prior to considering Coopers & Lybrand's advice that privatisation would be financially feasible.
The noble Lord, Lord McIntosh of Haringey, referred to consultation with staff. The decision to privatise RAS was made by Ministers in the light of advice that privatisation was financially feasible. It was a decision consistent with the Government's policy to encourage enterprise by releasing potential into the private sector free from the constraints of public ownership. The staff were informed of the decision when it was announced, in November 1995. Since then, management has kept them fully informed of progress. My right honourable friend the Chancellor of the Duchy of Lancaster visited RAS at Basingstoke in May to hear for himself staff concerns about the privatisation. The staff had the opportunity earlier this week to meet the shortlisted bidders and to question them directly on the proposals for the future of RAS and the staff.
My right honourable friend the Chancellor of the Duchy has agreed to visit RAS again shortly to hear staff reactions to the bidders' proposals before any decisions are made on the preferred bidder.
It would have been inappropriate for Ministers to have consulted the staff on the principle of privatisation. That was rightly a decision for Ministers, taking into account the effect of privatisation on the public service and the wider impact on the economy. I suggest that since the announcement we have made every effort to keep staff fully informed of progress, and they are being consulted for their views on the bidders' proposals.
My noble friend Lady Park of Monmouth expressed her concern about staff who do not wish to transfer to the new company and whether they have the option of remaining in the Civil Service. All requests for transfer from RAS to other posts in the Civil Service are being considered sympathetically on their merits. I understand that to date no requests have been refused, but it is important, as the noble Baroness will recognise, in the interests of the staff as a whole and for the future of the business, that RAS is sold as a viable business.
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The noble Lord, Lord Chorley, raised the question of an assurance given to RAS staff by Mr. Trevelyan in 1989 that the creation of the agency was not a first step to privatisation. I do not believe that the criticism which he levelled is a fair one. Government policy on next steps agencies has always been that the move to agency status is not directly a step towards privatisaion.
Lord Chorley: My Lords, I am sorry to intervene but I was only quoting from the report. I made no comment. I just quoted from the report.
Earl Howe: My Lords, I am grateful to the noble Lord and I apologise to him for the fact that I was not here to listen to his remarks. I take the point to which I believe he was referring.
Government policy on agencies has always been that the move to agency status is not directly a step towards privatisation. Where privatisation has been seen as a clear intention for an agency, an announcement has been made to that effect. It has always been part of the next steps initiative that all agencies should be reviewed periodically and that a range of options, including privatisation, should be considered by Ministers to see whether the work of the agency needs to be carried out by the public sector at all or whether it could be carried out better by the private sector.
The noble Lord, Lord Taylor of Gryfe, in a powerful speech, said that in his view matters relating to the Civil Service should be a question of consensus, not of party debate. I believe that the noble Lord is being uncharacteristically disingenuous. We are not talking here of a fundamental Civil Service reform. This does not affect the principles that underpin selection to the Civil Service, to which the Government are committed. We believe it offers Civil Service customers the prospect of further improvement in its recruitment process—in other words, the operational process of recruitment—and in value for money. That is the long and the short of it.
The noble Lord, Lord Taylor, whom I am sorry not to see in his place, also indicated his view that the report had not been given proper consideration, and that my noble friend's assurance not to go ahead with the privatisation if a show-stopper was revealed had not been fulfilled. The Government have carefully considered this report. We have had time to do so. We have accepted, in effect, nine out of 10 of the detailed recommendations. In addition, changes have already been made to the contract as a result of some earlier concerns expressed by the committee. The Government do not consider any show-stoppers to have been identified. But the Government agree, as my noble friend said, that the privatisation should not be completed if the final bids do not represent good value for money.
Lord Wallace of Saltaire: My Lords, I am puzzled as to how on earth one identifies good value for money. This phrase has been used several times. My increasing puzzlement over this entire business is that I can identify extra costs from privatisation, but I am totally unable to identify any savings from privatisation; and the

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Government have so far been unable to show that there will be further savings or profits to the public sector from privatisation. How, therefore, are the Government to discover, and explain to us, where value for money lies?
Earl Howe: The whole question of value for money is a balance of a number of considerations. It is not simply the proceeds from the sale. It involves the extra costs generated by the sale for the intelligent customer, the charges that new RAS will levy on its customers and other considerations besides. The fast stream customers will also wish to look at the prices that RAS proposes to charge once they are submitted. They themselves will need to come to a view on which of the bids represents best value for money. That is a matter of close scrutiny.
Perhaps I may go a little further. The noble Lord, Lord Wallace of Saltaire, and indeed the noble Lord, Lord Taylor of Gryfe, suggested that your Lordships had been sidelined by the Government as the plans to privatise RAS have proceeded. Were that true, I too would be concerned. But the amount of parliamentary involvement in this issue has, by any standards, been exceptional. There have been debates in both Houses. Not only have the Government made every effort to respond quickly to parliamentary concerns but they have also abided by their undertaking to allow your Lordships' Select Committee to report before proceeding irrevocably to a sale; in other words, completion has been postponed from July to September. We responded to the wish of the Opposition in another place for the sale of RAS to be debated there and it is worth repeating that the Commons gave their approval.
My noble friend Lady Park tried to make out that national policy is being made by consultants. In her inimitable way, she is entitled to her bit of fun. But there is a serious point, of which she is well aware; namely, civil servants and consultants both provide advice but Ministers decide.
To the noble Lord, Lord Rodgers, I say that my right honourable friend the Deputy Prime Minister did not take the decision alone. He has overall responsibility, but he conferred with his ministerial colleagues, as it was perfectly proper to do, and ensured that customer departments were consulted before the decision was taken.
Lord Rodgers of Quarry Bank: My Lords, I thank the noble Earl for giving way. The question to which I referred in my remarks was Question 441. The question to the Deputy Prime Minister was: "This was your personal decision?". His reply was: "Yes". In the view of the Deputy Prime Minister he made that decision alone.
I also ask the noble Earl, since he raised the matter, if the decision was made last September, as the Deputy Prime Minister said, what discussion there was in either House of Parliament before that decision was made.
Earl Howe: My Lords, I think the noble Lord knows the answer to that question. It is clear how the parliamentary process has operated since the Government made their first announcement. My point was that this is a matter which Parliament has had ample
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opportunity to consider. Bearing in mind that it is not a matter which needs to come before Parliament in the first place, I believe that the Government have behaved entirely fairly in allowing Parliament to express its view. That has been a valuable process, as I indicated.
Lord Beloff: My Lords, is my noble friend the Minister seriously saying that a major departure from a central principle of the British Constitution is not necessarily a matter with which Parliament should be concerned?
Earl Howe: My Lords, if my noble friend had been listening to my earlier remarks, he would have heard me express the view that I do not believe that this is a major constitutional departure.
Lord Beloff: My Lords, I thank the noble Earl for giving way. If the noble Earl, as he said, has been listening to the debate—indeed, to both debates in this House—he will have learned that that opinion is the opinion of many senior and respected Members of this House from all parts of the Chamber. He may hold his individual opinion. It is not the opinion that has been voiced in your Lordships' House.
Earl Howe: Let me address the opinion that has been voiced in your Lordships' House. My noble friend Lord Beloff made a very powerful speech, in which I believe he said that the Government were guilty of blurring the distinction between the public and private sectors. I disagree profoundly with that analysis. What we have seen over the past few years in terms of the reduction in the size and scope of the public sector has been of immense benefit to this country. Time and again the decision to privatise has been vindicated. The result is that we have set an example which others around the world are following with enthusiasm. To say that we are destroying the concept of the British state or blurring the division between the public and private sectors is the very antithesis of what the Government have been doing.
Leaving aside RAS for the moment, we have left behind the days of endless subsidies to loss-making state-owned enterprises. Gone are the days in the water industry and the telecommunications industry, for example, when the state was the regulator of standards. The separation of roles, the redefinition of the boundaries between public and private sectors, have been good for the taxpayer, good for the consumer and a thoroughly healthy thing for this country.
Baroness Park of Monmouth: My Lords, does my noble friend draw n distinction between nationalised industries, about which he has been speaking, and the permanent Civil Service serving the Crown? Does he make no distinction between those two kinds of body?
Earl Howe: My Lords, my noble friend ignores that we are not talking about the privatisation of the Civil Service. We are talking about the privatisation of a recruitment agency which performs an important, although very narrowly defined, operational role. That I think is the distinction that should be re-emphasised.

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Those who accuse the Government of dogma in these matters sometimes speak as though they believed that the boundaries of the state sector were sacrosanct and should remain immutable. If that itself is not dogma then I do not know what is. The noble Lord, Lord Taylor, asked what the rush was and why could we not allow more time. The future of RAS has been under consideration since the beginning of 1994. It was on the basis of this long consideration that we came to the view that privatisation was in the best interests of all concerned. The matter has now been further examined by the committee, we have found this valuable and we have responded fully to it. Further delay would not be in the interests of RAS or indeed its staff.
The noble Lord, Lord Rodgers, referred to the evidence given to the committee that there were no policy issues left to decide. Let me simply say this. While I would say that there were no significant policy issues left to decide, the decision on value for money to which I have already referred can only be finally decided when the final bids are assessed. In addition I would say to him that changes to the contract have been made and further changes are being made as a result of the committee's work.
My noble friend Lady Park questioned the adequacy of the security arrangements in private companies. I suggest to her that that is a complete red herring. As she knows well, there is a whole host of private companies handling sensitive government information. The arrangements for RAS have been considered very carefully in consultation with all fast-stream customers. They are content with the safeguards in the contract.
The noble Lord, Lord Chorley, indicated his opinion that the Government would lose control of intellectual property rights which would become merged with those of the new owner. In fact the Government will retain ownership of all intellectual property in the fast stream, including tests and exercises developed by the new owner on their behalf. The arrangements protect these and ensure that the integrity of the Civil Service selection is not threatened.
The noble Lord, Lord Wallace indicated that there would be additional costs from privatisation and enhancing the intelligent customer function. We shall of course take account of all additional costs in setting value for money, as I said earlier, and this will include modest increases in resources required for the intelligent customer unit to which my noble friend referred in his initial speech. It will be that unit which manages the main fast-stream contract. There will not be a contract manager in addition, nor will additional resources be required in customer departments. There will be no increase in costs as a result of the continuing involvement of civil servants in the process.
The committee's report concludes that in its opinion the privatisation of RAS is undesirable and unnecessary. It bases that view on concerns raised that the service to the public sector might deteriorate. However, as we have discussed today, the Government agree, either in spirit or in detail, with all but one of the committee's detailed recommendations.
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I cannot pretend that the committee's main conclusion is not disappointing. We believe quite simply that the business, once privatised, will be able to improve its services to its customers in the public sector and that it should be given the opportunity to do so. Expanding into new markets and increasing its share of existing markets will enable RAS to spread its overheads over a broader cost base. In the private sector the business will be free to consider the investment necessary for expansion into new markets.
The issues at the heart of the broad philosophical debate—the merits of privatisation, enterprise and wealth creation—are ones which your Lordships have discussed at some length on earlier occasions. The committee readily acknowledges that its remit was not to consider those issues and few of your Lordships, I venture to suggest, will have expected them to be resolved today. Better therefore that we conclude this debate by laying emphasis on where the Government's and the committee's opinions are in harmony.
As has been said many times, RAS is a centre of excellence in providing recruitment and assessment services to the public sector. The Government's clear view, as presented to the committee, is that once privatised RAS will be free to build on that reputation; to develop and expand its services. The committee's concern was that there should be no detrimental impact to the public service from privatisation. The Government share that concern. The key to maintaining the standard of service provided by RAS will be the safeguards which both the Government and the committee believe should be put in place and which will be put in place.
That is why I suggest that we can be confident that privatisation will deliver what we all want to see; that is, benefits to the business, its customers and the taxpayer. I am sure that we all wish RAS and its staff well in the important work ahead.
2.41 p.m.
Lord Slynn of Hadley: My Lords, I thought it appropriate, when introducing this report to the House, to do it in low key—what I believe the noble Lord, Lord McIntosh, would describe as a "non-ferocious" way. That seems to me to be the task of the chairman of the committee.
I am grateful to all noble Lords who participated in what has been a valuable and constructive debate. Obviously at this hour it would be inappropriate for me to repeat or comment on many of the suggestions and ideas put forward. However, I want to deal briefly with two matters.
The first is the point raised by the noble Lord, Lord Cuckney, who said that the cart had been put before the horse. I agree with him. But in the circumstances the House and the committee had no choice but to get on and deal with the matter in the time made available by the Government. I do not for a moment accept that the limitation on the time meant that this was bound to be a superficial or ill-considered report. On the contrary, much of the written evidence we received was clearly well thought out, well reasoned and based on considerable experience.

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As I said in opening, we could have had more evidence. I am not sure how valuable the headhunters would have been. But the House should not be under any misapprehension about this. Headhunters were invited to come and either did not reply or told us that they could not give any evidence in the time available. It may well be that the British Airways evidence given to us is different from that to which the noble Baroness, Lady O'Cathain, referred. But it seems to me to be quite astonishing that nobody on the committee felt that the head of recruitment of British Airways was not a suitable person to tell us what were the recruitment processes of British Airways. If that was so I recognise and acknowledge the decision arrived at by the noble Baroness, Lady O'Cathain, in her speech in the debate in the House, that on the evidence before us the case was not made out. And that was our task.
My second point is a different one. I am grateful for all that was said by the noble Viscount the Lord Privy Seal in dealing with the detailed recommendations of the committee. But that was very much on the periphery of our inquiry. As I said in opening, the central question was whether we thought that a case had been made out to privatise RAS. It was to privatise RAS, not the Stationery Office, the environmental health or occupational health authority and not any trading company, but this very particular part of the public service. Our task was not to ask whether, as the Minister has just said, RAS would expand and grow fat and rich, but for whose benefit, if any, in the public sector this change would take place.
I was extremely grateful to hear the maiden speech of the noble Lord, Lord Gillmore of Thamesfield. It was as great a delight to listen to his elegant and thoughtful speech as it was of value to have him as a member of the committee. But at the end of the day, apart from these questions of detail, I am left with a very clear impression that the committee came to the right conclusion on objective grounds. I did not hear today any reason for the privatisation of RAS, which in any way went beyond what we heard in evidence in our committee. Indeed, the Government's reply reminded me of the days when, as a station duty officer, one was told that there was to be a visit the following week by the air officer commanding. The routine instruction was, "If it doesn't move, paint it". I had the feeling at the end of the speeches of both Ministers today, as I did when we took evidence in committee, that the policy is, "If it is there, privatise it". For my own part I am quite satisfied that in its report the committee came to the right conclusion. I very much regret that the Government have not given more weight to that recommendation.
On Question, Motion agreed to.

Business
2.47 p.m.
Lord Strathclyde: My Lords, the House will be aware that my noble friend Lord Howe proposes to make a Statement on matters concerning defence. In view of the fact that he has been in this House replying to the debate just concluded, I hope that the House will
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feel it appropriate for there to be a short adjournment during pleasure so that he can prepare himself before making that Statement. Therefore, I beg to move that the House do now adjourn during pleasure until 3 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 2.48 until 3 p.m.]

Defence Contracts
Earl Howe: My Lords, with the leave of the House, I should like to make a Statement about three major defence equipment decisions for the RAF. The Statement is as follows:
"To meet the Royal Air Force's requirement for a conventionally armed stand-off missile, the Government have decided, following the conclusion of a very successful competition, to buy Storm Shadow missiles from British Aerospace Dynamics, subject to the negotiation of satisfactory terms. This decision will provide the Royal Air Force with a highly capable stand-off missile able to mount precision attacks on high priority targets, the need for which was demonstrated in the Gulf War. This decision will give excellent value for money for the taxpayer. It will also cement the recently announced merger of the missile businesses of British Aerospace and Matra of France. This will strengthen British Aerospace's ability to play a leading role in a restructured European industry. The order will directly sustain some 1,600 jobs in our defence industry and work to the full value of the order will be placed with British companies.
"The RAF also requires an advanced air-launched anti-armour weapon to defeat enemy battle tanks and other armoured vehicles and which can be deployed rapidly to and around the battlefield. The Government have decided that, subject to the negotiation of satisfactory contract terms, we will buy Brimstone from GEC Marconi Dynamics to meet this requirement. The company has won this tender in the face of fierce international competition, demonstrating that the UK is at the cutting edge of world missile seeker technology. We believe that the order will directly sustain some 700 jobs in our defence industry and, as with Storm Shadow, British companies will obtain work to the full value of the order.
"The Royal Air Force's maritime patrol fleet provides a key part of the UK's anti-submarine and anti-surface warfare capability. It also contributes significantly to our ability safely to deploy and sustain contingency forces, including the Joint Rapid Deployment Force. In addition to their operations in the North Atlantic, Nimrod aircraft played vital roles in the Gulf War and more recently over the Adriatic, supporting operations in Bosnia. The Nimrod MR2 aircraft have been in service now for a quarter of a century; we need to replace them from the turn of the century.
"The Government have decided to purchase 21 Nimrod 2000 aircraft from British Aerospace, subject to the satisfactory completion of contract

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negotiations. As prime contractor, British Aerospace will be wholly responsible for systems integration and for the airframe. Rolls-Royce will supply the engine and Racal the radar, while key elements of the mission system will be provided through a strategic partnership between GEC and Boeing. The order will directly sustain around 2,600 UK jobs. Once again, work to the full value of the order will be placed with British companies.
"These three orders have a combined value approaching £4 billion, and will sustain around 5,000 British jobs. They underline the Government's determination to deliver the benefits promised by Front Line First by sustaining and enhancing the fighting strength of our Armed Forces."
My Lords, that concludes the Statement.
3.4 p.m.
Lord Williams of Elvel: My Lords, I am grateful to the noble Earl for reading out the Written Answer that he gave to the noble Lord, Lord Peyton of Yeovil, the text of which was in our hands earlier today. Sometimes the Government seem to forget that this House is a House of Parliament. The announcement of expenditure of £4 billion should have been made in the form of a Statement to this House or preferably to both Houses before another place had risen for the Summer Recess.
Only on Tuesday, the Prime Minister said that the contracts were being carefully evaluated and that an announcement would be made in due course. The House of Commons Defence Committee said that it expected an announcement to be made before the Recess. But I am sure that all noble Lords are surprised by the early editions of the Evening Standard which carry this whole deal—if I may put it like that—in extensive detail. It appears that there was deadlock between the Ministry of Defence and the Treasury, which was keen to secure spending statements. It goes on:
"The Defence Secretary rushed onto the airwaves today to hail the `tremendous order' ahead of an official Government announcement, expected later in the day".
The report goes on to say, and I have no reason to believe that it is wrong:
"Mr. Heseltine brokered the final deal in a meeting of Ministers in his Whitehall office yesterday, which began at 7 p.m. and finished by 8.30 p.m.".
Are we really to suppose that the defence and defence procurement of this country are subject to Cabinet Ministers briefing the press before Parliament has had an opportunity to discuss the matter?
I imagine, since the noble Viscount the Leader of the House was at the Cabinet meeting this morning, that he put up his hand and said, "By the way, the House of Lords is still in Session".
Lord Strathclyde: He was here. He made a speech.
Lord Williams of Elvel: My Lords, he may have been here, as the noble Lord the Chief Whip seems to imply, but I imagine the view was put that Parliament was still in Session; that although the House of Commons had gone into Recess, the House of Lords had not gone into Recess. It would have been proper for the announcement to have been made by a Statement in this House. There have been many occasions when this House has been sitting and the other House has not been sitting and Statements have been made here. It seems to me absurd that we have been treated in this way.
Leaving aside the question of the position of this House—that is an important matter which your Lordships will wish to debate at some time in the future—there is no doubt that the contracts were needed urgently. Indeed, we have been pressing for an announcement on those contracts. If there had not been the dispute between Cabinet Ministers, which was apparently finally resolved by the Deputy Prime Minister yesterday evening, we should have had an announcement earlier. Indeed, in its report the House of Commons Defence Committee stated:
"We understand that major announcements are due before the summer recess on four major procurement orders, as well as on the Bett report on Manpower, Career and Remuneration Structures".
I ask the Minister to confirm that before the House goes into Recess there will be a Statement on the Bett Report on Manpower, Career and Remuneration Structures. If not, it will again be slipped out by Written Answer during the Recess. We all know how government managers run their business.
I do not believe that that is the right way for Parliament to be treated. I do not believe that that is the right way for the UK's future defence requirements to be decided—in open battle, each side putting its own spin on its own arguments between various Ministers in the Cabinet.
Although we welcome these announcements in principle, will the Minister confirm that the RAF asked for 25 rather than 21 Nimrods? Will he then give the House an assurance that the RAF is satisfied that it can carry out its operational requirements with the 21 which appear to be the Treasury pound of flesh that has been cut away from the original requirement of 25?
Will the Minister also confirm that the price of those contracts has already been established? When he said in the Statement that the contracts were subject to satisfactory terms—the press release has somewhat different wording on the matter—will he confirm that the price has at least been agreed and that there is no question of the contracts in some way failing from negotiation of terms?
Finally, will the Minister agree that the Armed Forces have had their full measure of Treasury interference and that the report, which I quoted in our defence debate of 12th July, and to which the noble Earl failed to reply, that the Treasury is still asking the Ministry of Defence to cut its budget for next year by £400 million, is not

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the case and that if the Treasury is asking that, Mr. Portillo will resist it in the "victorious" way in which he has resisted the Treasury today?
Lord Wallace of Saltaire: My Lords, I welcome the announcement, which ends a period of uncertainty. I too express a certain amount of cynicism about the way in which it has been undertaken and about the undignified bargaining, to say the least, between the Treasury and the Ministry of Defence. Strong rumours have it that the sale of Ministry of Defence housing was used as part of the bartering between the MoD and the Treasury. That is another example of the way in which the Government are selling off long-term assets in order to buy shorter-term assets, or against income. That is most distressing.
I note that the announcement marks a further stage in the closer integration of a UK defence procurement industry with our West European partners in the proposed merger of British Aerospace with Matra. Of course, it is highly desirable that as equipment becomes more expensive and as the size of procurement shrinks we should, as far as possible, move towards common procurement with our closest allies and towards a restructured European industry. In that context, I wish to ask the Minister which other countries are expected to order the advanced air-launched anti-armour weapon and how far that will be a part of the inter-operable system with those of our allies with whom we are most likely to operate. How far will the new Nimrod system be fully inter-operable with those of our allies, in particular around the North Sea, who require and have similar equipment?
Given the inherent and structural inefficiency of the public service, military and civil, about which we have heard today, I am bound to ask the Minister how far further privatisation has been considered in the operation and maintenance of the equipment which is about to be procured. It occurred to me, for example, that the new generation Nimrod might possibly be contracted out to Iceland Air or Aer Lingus under a contract to maintain bases, subject to RAF monitoring. Air Singapore and Malaysian Airlines are, so the Financial Times tells us, the most efficient operators in this sector, but they may be a little far away to undertake such a contract.
Finally, I wish to ask the Minister how much further this takes us towards getting better value for money out of British defence by moving towards closer integration with that of our European partners, which seems to many of us the only effective way forward.
Earl Howe: My Lords, I am grateful to both noble Lords on the Benches opposite for the welcome, if somewhat guarded, that they have given to the announcement. It is somewhat characteristic of the noble Lord, Lord Williams, that he should perform a stately dance around the real issue. The real issue is that this announcement is wonderful news for the RAF, for British industry and for British jobs. It is that upon which your Lordships should focus.
He referred to his disappointment that the announcement should have been left to the end of the parliamentary Session. I agree that it is regrettable that we
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were not in a position to make the announcement while the other place was still sitting. But I do not believe that anyone would argue that announcements of such important orders for British industry should be held over until another place returns in October. The position is that Parliament has been informed. Your Lordships' House has received the benefit of that announcement. We on this side of the House were only too ready to respond to the wish of your Lordships that we should add to that in the form of the Statement which I have just made.
The noble Lord, Lord Williams, asked specifically about Nimrod and why we did not order 25 aircraft. That matter was looked into very carefully. The Nimrod 2000 is an extremely effective maritime patrol aircraft. Our analysis has shown that a fleet of 21 Nimrod 2000 aircraft, providing a front line of 20 aircraft, will provide the capability required by the RAF to do the job. There is no question of any Treasury cut or anything like that.
The noble Lord asked also about the Bett report. That is not directly related to the announcement which I made but I can tell him that an announcement was made yesterday in relation to that in response to a Written Question both in your Lordships' House and in another place.
The noble Lord, Lord Wallace, asked what were the opportunities and prospects of other countries' purchasing this equipment. It is early days but from experience we have found that if the Ministry of Defence in the UK places an order of that magnitude and importance, other countries around the world tend to sit up and take notice. It is a wonderful tribute to British industry that in fair and open competition, our own companies have come up with leading-edge technology at keenly fought prices to enable us to place the orders in this country.
I suggest that that will rebound to the benefit of this country eventually. British Aerospace has signed an agreement with Boeing and McDonnell Douglas to market new-build Nimrod 2000 aircraft worldwide. Export opportunities will arise also from the strategic partnership being established between GEC and Boeing on the mission system.
The noble Lord, Lord Wallace, referred also the need to have inter-operability. I thoroughly endorse the sentiments that he expressed. He is perfectly right that inter-operability is one of the main thrusts of our work with our NATO allies, both in connection with equipment such as this and, more generally, throughout the three services. I have no doubt that as the contracts are worked out in detail, those aspects will be looked at with great care.
The noble Lord, Lord Williams, referred to press speculation about the defence budget. I should say to him only that it is hardly surprising in what is a very early stage of the public expenditure round that the press should be speculating as it customarily does. It is early days. I am not in a position to tell the noble Lord what will he the outcome but he knows full well that the Government are committed to maintaining the front line.

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Indeed, that is the thrust and purport of the announcement that I have made. We intend to continue as we have hitherto to ensure that our Armed Forces receive the equipment which they need to do the job.
3.19 p.m.
Lord Boyd-Carpenter: My Lords, I join with the noble Lord, Lord Williams of Elvel, in protesting against the procedure which the Minister and the Government have followed in relation to this matter. It is plainly a Statement of the greatest importance, involving, as it does, major aspects of the defence provision that we are to make for this country in the years ahead. It seems to me to be quite extraordinary that the Government were prepared to announce the contracts by way of a letter to a noble Lord—although that is a very good thing—but that they were not prepared to make a Statement to a House of Parliament which was sitting.
On reflection, I hope that my noble friend will realise that that was an error of judgment. I very much hope that he will indicate that that practice will not be followed in future and that, when a major policy statement has to be made when either House of Parliament is sitting, a Statement will be made to that House embodying the material involved. Otherwise, I take the view that we are disregarding the importance of Parliament and the importance of the Statement and, indeed, undermining the proper working of government.
Earl Howe: My Lords, I am grateful to my noble friend for raising a very proper concern about the way in which announcements of such importance are made to Parliament. My noble friend suggested that the announcement was by way of a letter to an individual noble Lord. In fact, it was not a letter; it was a Written Answer to a Question which my noble friend Lord Peyton had tabled and which will, therefore, appear in today's Hansard. I believe that that reflects the importance that Her Majesty's Government attach to the matter.
It has always been the convention in this House that, if Members on the Benches Opposite wish us to make a Statement on such matters, such a request is most willingly listened to. I need hardly say that we did indeed do so. There is no question of disregarding the importance of Parliament: quite the reverse is the case. I hope that my noble friend will accept that.
Lord Chalfont: My Lords, I am most grateful to whatever arcane processes went on earlier today to enable the Statement to be made to your Lordships' House. It is indeed a Statement of great moment and importance. As other noble Lords have said, it might have been better, had it been possible, to have had a Statement in both Houses, whereupon Members could have acclaimed the sagacity, foresight and wisdom of the Government—a spectacle which is all too rare these days.
I wonder whether there is any truth in the suspicion that some of us have; namely, that the delay was caused partly by the wrangling over the married quarters estate sale and that that was in some way connected with the unfortunate delay over the announcement of these important contracts. However, I believe that too much is perhaps
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made in press reports—and, indeed, elsewhere—of wrangling, undignified or otherwise, between the Treasury and the Ministry of Defence. There is bound to be that kind of conflict between those two departments in the form of government that we have. Indeed, it would be very surprising if it did not happen.
Having said that, I want to congratulate the Government wholeheartedly on the announcement of these contracts. The Royal Air Force, and indeed the Armed Forces as a whole, need the equipment very badly. It will be good for their efficiency, for their fire power and also for their morale, which will be a very welcome factor in these days. Moreover, it will be good for jobs.
Before I conclude, I should like to draw attention to one aspect of the contracts which has already been mentioned briefly by the noble Lord, Lord Wallace. However, I want to go a little further into it. I have in mind the very international nature and flavour of all the contracts. The British Aerospace bid for CASOM, for example—the stand-off missile—was made with Matra, the French company. Indeed the British Aerospace Storm Shadow, which is the weapon chosen for this purpose, is based on the Matra missile called Apache. GEC Marconi' s Brimstone missile is based, perhaps appropriately, on Rockwell's Hellfire missile and reflects a working relationship between Lockheed Martin and GEC Marconi. As we heard, GEC and Boeing are involved in a strategic partnership as regards the Nimrod maritime patrol aircraft replacement.
All that is extremely interesting. Like the noble Lord, Lord Wallace, I ask the Minister whether it foreshadows a welcome closer integration of alliance defence procurement, not simply on a pan-European basis but on an alliance basis as a whole. It seems to me that in future with missiles and other military equipment becoming more and more sophisticated and more and more expensive, single nation procurement will become a thing of the past. Can the Minister assure us that we are moving towards a rationalisation and integration of alliance defence equipment procurement?
We should congratulate both British Aerospace and GEC on their success in these competitions. As I understand it, British Aerospace beat off six highly competitive international bids and GEC won the two or three other international bids. It has been a great triumph and success for the British defence industry.
As regards the noble Lord, Lord Richard's, comments this morning on the announcement and the suggestion that he had perhaps been part of a filtration process, although the filtration process may have been a little murky, I suggest that the coffee at least is good, strong and invigorating.
I do not speak on behalf of anyone. I apologise now for attempting to intervene earlier as though the Cross-Benchers were a political party of some kind. I must now emphasise that they are not, and that I speak personally. Speaking personally, I congratulate the Secretary of State for Defence and the Government on the announcement of these contracts and on the great success that they will bring both to the Armed Forces and to the British defence industry.
Earl Howe: My Lords, I am most grateful to the noble Lord, Lord Chalfont, for the welcome that he has given to this announcement, and particularly for the warmth of that welcome. He asked me specifically about defence collaboration. It would be no exaggeration to say that this is, in the world of defence procurement, the flavour of the month. As the noble Lord well knows, the rationalisation of the defence industry, particularly on the Continent, is a matter which is very much under the spotlight.
In this country whilst there may, for all I know, be further rationalisation yet to be seen, I think that the activity in that direction will be concentrated in the years ahead with our Continental neighbours across the water. The noble Lord referred to the CASOM missile, Storm Shadow. When we took the decision to purchase that weapon we took all relevant factors into account, including, of course, cost effectiveness, operational effectiveness, risk and defence industrial issues. As I said, it is estimated that the procurement of Storm Shadow will help directly to sustain around 1,600 jobs throughout the UK. Storm Shadow is based upon the Apache missile which has been developed by Matra of France. Apache currently forms the basis of a Franco-German collaborative project. The UK selection of Storm Shadow will enable the proposed joint venture between British Aerospace and Matra to proceed. I believe that is a welcome by-product of this announcement.
On a more general note, I am sure the noble Lord will be aware that what was initially conceived as a Franco-German defence procurement agency will now, as was announced recently, be a Franco-German, UK defence procurement agency. That is a development of which we have high hopes for the future. It is important that we combine forces with our allies in the European part of NATO as well as our United States allies. I believe that that is the start of some interesting things to come.
Baroness Seear: My Lords, will the Minister agree that the inappropriateness with which this matter has been handled is underlined by the fact that most of us heard about it on the "Today" programme, with the inevitable comments from those great experts on defence who run that programme?
Earl Howe: My Lords, this cannot be a unique occasion in that regard. I often wake up in the morning and listen to the radio. I hear things about which I am not aware even though I am supposed to be aware of them; and they turn out to be completely false. At other times there is some nugget of truth within them.
I believe that the time to assess these matters is when the Government actually announce them rather than when broadcasters or journalists speculate upon them.
Lord Kennet: My Lords, perhaps I may take the Minister back over some of the things he said in the Statement and in various answers about the internationality of the contracts. He told us that one contract was buying in American made instrumentation, I think for aircraft. We learned that there was to be a
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joint marketing arrangement between the British lead producer and a couple of American firms. In his original Statement the Minister said, if I remember aright, that in each case the British firm was to receive payment to the full contract value. Does that mean that in each case there will be a through payment from the British firm to American firms, and indeed French firms, whether for parts of the manufacture or for joint sales deals elsewhere in the world? It is a slightly complicated question. I apologise. But I believe that he knows what I mean.
Earl Howe: My Lords, it is a complex question. I say that because the precise details of how the financial arrangements are to be settled have yet to be decided. They are subject to contractual negotiation. In so far as I am able, I shall write to the noble Lord with those details.
I can only reiterate for the time being that the work to the full value of those contracts will be placed in the UK even though within the contracts there are collaborative joint ventures.
Lord Renton: My Lords, is my noble friend aware that Members of both Houses have been longing to get away from Parliament as early as possible this month because school holidays began some time ago? Whether or not Parliament is sitting, Government have to continue from day to day. Often important decisions have to be made during the long Recess.
As to this decision, is it not perfectly clear that no Statement could have been made even in Answer to a Written Question until all the negotiations had taken place, all the technical decisions taken as a result of them, and an opportunity given to the Cabinet, as it was yesterday, to decide the matter? Are we not fortunate that a copy of the Answer to a Written Question was given to the Leader of the Opposition in your Lordships' House? We should be grateful to him for drawing attention to the fact that it was an important matter; and grateful to my noble friend for having made the Statement.
Perhaps I may ask a few questions about the financial and economic features of the matter. The Minister has told us that there will be £4 billion of expenditure. Can the noble Earl say over what period that will be incurred, and give us a broad idea as to what will be the source of the funds? One hopes that it would not be from an increase in taxation nor much of an increase in the PSBR. However, if the Minister can give us an indication, it would allay the anxieties.
Further, there would surely be an advantage to the balance of payments for this country. Since the manufacturing will take place here to a great extent, we should benefit in that respect as well.
Earl Howe: My Lords, I am grateful to my noble friend who shows his long experience both in your Lordships' House and in government in expressing his views. I entirely agree with them. Procurement decisions of this kind are immensely complex. With orders approaching £4 billion, the Government naturally want to be certain that they can be afforded within the

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long-term programme for defence. As my right honourable friend the Secretary of State for Defence said, there was a small delay before we announced the orders, but for perfectly understandable reasons. It is fortunate that we have been able to make the announcement to Parliament and to your Lordships' House before the Summer Recess.
The short answer to my noble friend's question on the financial arrangements is that the programmes will be funded from the efficiency and savings measures that the Ministry of Defence has taken and planned for over the past few years in the support area, in the exercise known as Front Line First. When my noble friend the Lord Privy Seal had the responsibilities which I now hold, he announced the exercise to your Lordships' House two years ago. Although expensive, the programmes are affordable within the public expenditure settlement of the Ministry of Defence. I believe that the Government's emphasis on procuring modern equipment and ensuring that our Armed Forces are properly equipped for the tasks which we give them is the right one. The proportion of the Defence Budget that is allocated to equipment is higher now than it has been for many years. Furthermore, it is higher than that of many of our NATO allies. I believe that that fully vindicates the Government's approach. I repeat that it is welcome news to the RAF.
My noble friend also asked about the balance of payments. I endeavoured to cover the point earlier when I referred to the export opportunities that should accrue to British industry as a result of the Government's choice of equipment. It is early days, but we have found through experience that when we in this country order British equipment, the reverberations are not slow to echo through the world and export orders tend to flow. We hope that that will occur in this case.
Lord Elton: My Lords, so much has been said about the genesis of the order that I would like my noble friend to give us the comfort or confirmation of the following. The conduct of government consists of the balancing of the different needs of the British people involving expenditure of money and the different interests represented by various departments, each of which has to argue its case against the central body—the Treasury. As noble Lords opposite will discover, if ever they are successful in getting into office, that balancing always results in fiercely contended arguments. If they become acrimonious, it may have something to do with the fact that it is July. Sometimes that spreads to this House.
Noble Lords should be grateful to my noble friend for the considerable breadth of his knowledge of the subject, with the almost complete absence of messages from the Box to prompt that great knowledge. He displayed and deployed it in its fullness to the Benches opposite of which the noble Lord, Lord Williams, at one stage represented 50 per cent. of the occupants.
Earl Howe: My Lords, I can only express my appreciation to my noble friend for those very kind observations. As he will know, the Government's aim is
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to keep public expenditure under control, as is perfectly right and proper. That will always be a challenge. But these equipment orders are entirely separate from the annual public expenditure round, which will proceed as it normally does over the months ahead. To refer to the early remarks of the noble Lord, Lord Williams, all that is still to come.

Adjournment
3.40 p.m.
Lord Strathclyde: My Lords, I beg to move that the House do now adjourn.
It is the most pleasurable duty of the Government Chief Whip to move the Adjournment for the Summer Recess. This summer it is something to which I have been looking forward with great anticipation. Indeed, I came to the conclusion that July had started some time after Easter, given the torrid debates that we have had on a whole number of subjects between then and now. I was also hoping that the House could rise rather earlier this afternoon than it has done. However, I am sure that the whole House will have been very grateful to my noble friend Lord Howe for making a Statement which contained such very good news for the United Kingdom and which noble Lords obviously found of very great interest. In fact, I am sure that the noble Lord, Lord Graham of Edmonton, the Opposition Chief Whip, and whoever will reply from the Liberal Benches and the Convener will feel rather pleased that we are making this Statement with a rather more full House than is usually the case at this stage of the Session.
In moving this Motion, I take the traditional opportunity to thank the staff in all quarters of the House who serve us so admirably and to whom we owe so much. Their endeavours enable us to carry out our business. I am sure that I speak for all noble Lords in expressing our very great gratitude.
I also thank the noble Lord, Lord Graham of Edmonton, and the noble Lord, Lord Harris of Greenwich, for the friendly co-operation that we have enjoyed. From time to time usual channels relationships come under strain. I am glad to tell the House that our personal relations are, nevertheless, always cordial, and I am grateful for that.
This year my statement is tinged with a hint of sadness. It will be known to your Lordships that my private secretary, Mary 011ard, is leaving my office to return to the Clerks' Office. However, she is being replaced by the very able and capable Simon Burton, who I am sure will serve the interests of the whole House as expertly as his predecessor.
The Session is, of course, not yet over. There are three days to go when we return in October. I hope that all noble Lords will return with renewed vigour and excitement as we prepare for the final Session before the general election.

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I end by wishing all your Lordships and all our staff a very peaceful Summer Recess. I am sure that those of you who have not yet unpacked your buckets and spades will do so in the very near future.
Lord Graham of Edmonton: My Lords, the Government Chief Whip has brought into the open something that he and I promised to keep confidential; that is, that we enjoy cordial relations. I can assure the House that that will do my career path no good at all.
It is my great pleasure to speak for these Benches, as it has been over seven years as Chief Whip here, 14 years in this House, and 23 years all told in another place. I have news for those who feel that this summer has been either exhausting or exciting: the summers of 1978, 1982, 1986 and 1991 were the same as this one—they were all summers before a general election. This House does not escape the heightened interest and partisanship which are displayed from time to time. None of us would want that to be diminished. However, as the noble Lord the Government Chief Whip said with absolute sincerity, we could not enjoy our work here, as well as receiving satisfaction from it, without the full-hearted support of staff all round the House. I was grateful indeed that there was not, as a few years ago, a repetition of names and departments. We want to take them all in.
But he did make the exception, which was quite right, about his private secretary, Mary 011ard. As we know, her husband, Ed, also served in the same position with as much distinction as she did. The Government have, of course, lost a pair of 011ards and gone for a Burton! In case anyone thinks what a clever lad I am, I should say that I saw it written on a card to Mary last night and I was determined to use it myself.
Nevertheless, outside the sharp political differences which are part and parcel of why we are here and why the House is here, there remain, on a very firm foundation, good personal relations, not merely at the Chief Whip's Office, but also at ministerial and shadow ministerial level, without which this would be a poorer place. On behalf of my noble friends, I warmly welcome and endorse the remarks of the Government Chief Whip and of course, in addition, wish him, Jane and the children a happy summer too.
Baroness Seear: My Lords, in the temporary absence of both of our Whips who seem to have slipped away, it falls to me to wish a very happy Recess to everybody. It has not been, in some ways, the easiest of Sessions. There has been a great deal of very controversial legislation, but I think your Lordships' House has, on a number of occasions, been shown at its very best in the way in which it has handled these controversial matters.
That is enough of serious matters for the present. We are now all looking forward, not in my case, thank God! to buckets and spades—I cannot imagine why anybody wants buckets and spades—but to enjoying whatever is our form of enjoyment during the Recess before us.
I would especially like to join in the thanks to the staff. We are quite extraordinarily fortunate in the staff which we have in your Lordships' House. The staff
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combines remarkable efficiency with an unbelievable knowledge of what is going on. I do not know from where they obtain this knowledge, but if you wish to know anything you ask one of the attendants. They can tell you where people are, even if in the most unlikely of places. I do not know whether they have some sort of spy system. They will say, "No, he has not gone out this way, he has gone out that way", or "You will not find him in the bar because he doesn't drink, but you will probably find him in the library". That is the sort of information which is absolutely invaluable. I cannot imagine anywhere where the staff can give you such detailed, well informed, up to date and extremely useful information. Also, they are extraordinarily helpful. If one ever needs any kind of personal assistance there is no trouble to which they will not go. We are all extremely grateful to them.
The Earl of Sandwich: My Lords, it very happily falls to me, on behalf of the Cross Benches, at the generous invitation of our Convenor, to follow up and reinforce what has already been said about the staff who make this Chamber so unique. I willingly endorse the sentiments expressed for the support we have received, but I would particularly like to mention the Doorkeepers and Mr. Bailey, whom we wish very well in his retirement. His was the first friendly face I saw in this House, and certainly has not been the last. We wish him well.
I would also like to mention the house-keeping staff and those who are invisible behind the scenes, the Hansard reporters, the librarians, whom I have always found obliging and highly competent.
I have also been asked to mention the changes that have been taking place and to welcome them. A particular one which I have noticed is in the computing room. I would like to offer congratulations to all concerned and to the Hansard reporters who have had to work there in extra time.
I must briefly mention the beef in the dining room. It is British beef and it is excellent.
It is perhaps worth noting, very briefly, that as your Lordships may have noticed, the numbers of Cross-Benchers have steadily been increasing. We are 306 now and we will be 308.
It may be of some comfort that over time we could see develop a more finely balanced House, numerically speaking. I myself believe that that would be in the long-term interests of the House. Of course we speak as individuals and the speech today by the noble Lord, Lord Gillmore, was a paragon in that regard. We feel some satisfaction that we are not subject to the disciplines that prevail elsewhere in the House.
Finally, let me add, as a newcomer, that I personally have appreciated the kindness extended from all sides. I have begun to distinguish between the traditional courtesies, which are important, and the sincere good will which underpins the whole work of this House. On behalf of the Cross Benchers of all ages and persuasions, I wish the House a happy Summer Recess.
House adjourned for the Summer Recess at ten minutes before four o'clock, until Tuesday 15th October next.

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