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Commons Chamber

Volume 164: debated on Monday 8 January 1990

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House Of Commons

Monday 8 January 1990

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

Hythe Marina Village (Southampton)

Wavescreen Bill

Isle Of Wight Bill

Orders for consideration of Lords amendments read.

To be considered on Thursday.

Buckinghamshire County Council Bill Lords

London Local Authorities Bill Lords

Orders for consideration read.

To be considered on Thursday.

Oral Answers To Questions

Social Security



To ask the Secretary of State for Social Security how many applications have been made to the social fund since its inception for loans and grants by people with AIDS; and how many of these have been refused.

I am afraid that the information requested is not available. Applications for social fund payments are quite properly not required to give any information about their medical condition, and thus data on the number of applications from people suffering from a particular medical condition is not collected.

When will the Government accept that the social fund has been a social disaster for the poor? Is the Minister aware that people with AIDS are among those who are suffering most as a result of the abolition in April 1988 of the weekly additions and special payments?

The Government have demonstrated their concern for AIDS sufferers and the terminally ill by announcing the intention to extend entitlement to attendance allowance. Far from being a failure, the social fund has been a success because of the help that it has given at the margins of the social security system to those most in need of help. It is certainly a great deal better than the system that it replaced.

I acknowledge the work that the Government have done for AIDS sufferers. However, will my right hon. Friend ensure that social security officers in local offices receive training on aspects of AIDS and how it may apply to the social fund? Will he also have a word with our right hon. and learned Friend the Home Secretary about what help prisoners on discharge receive if they leave prison HIV positive?

I shall note those points and have a word with my right hon. and learned Friend about the matter. We seek to see that staff in our local offices are trained to deal with the range of sensitive issues with which they are presented, and I shall look at the request of my hon. Friend the Member for Salisbury (Mr. Key) in relation to that.

I recognise that the Government have moved some way in relation to AIDS sufferers, some of whom, of course, were not in any way personally responsible for what has happened to them. However, is it not scandalous that some Conservative Members have said that it was quite right for AIDS sufferers to be treated in the way that they are, when in many cases the sufferers were not personally responsible for contracting the virus? Even if it was the sufferer's fault, it is not right for them to be treated as they are and I ask the Government to have another look at the whole matter.

Those matters are generally outwith my responsibility and are rather for health Ministers. My right hon. Friend the Secretary of State announced the first tranche of money for the Macfarlane Trust for haemophiliacs suffering from AIDS, and recently an extra £19 million has been provided for that trust.

Does my right hon. Friend agree that there has been a welcome transformation over the past few years of the public's attitude to AIDS sufferers which has moved from ignorance and prejudice towards sympathy and understanding? The Government should take some credit for that. Will my right hon. Friend ensure, through his Department, that where possible his local offices give help promptly to AIDS sufferers so that they do not have to wait unduly for any assistance that is available to them?

I agree with my hon. Friend's first point about the public's attitude and I welcome that, as he has. The removal of the six-month waiting limit for the terminally ill is a significant move towards meeting my hon. Friend's second point.

Pensioners (Charter)


To ask the Secretary of State for Social Security what recent meetings he has had with pensioners' representatives to discuss the pensioners' charter; and if he will make a statement.


To ask the Secretary of State for Social Security what is his policy towards the pensioners' charter; and if he will make a statement.

While I am not aware of any current request for such a meeting, our policies will continue to reflect our concern with pensioners' needs—as was clearly shown, for example, by the extra help given last October to some 2·5 million of the disabled or older pensioners who are least well off.

Yes, and a lot of those people have written to hon. Members, particularly Opposition Members, to tell them that they did not get a penny piece out of those so-called improvements. Why does not the Secretary of State do something about the pensioners' charter? There is all this waffle and talk about the social charter. Let us give the pensioners a square deal by abolishing standing charges and introducing concessionary fares for all pensioners. Why does the right hon. Gentleman not repay the £12 a week that has been stolen from every single pensioner in the land by this Tory Government in the past 10 years?

Many hon. Members will recognise that what most effectively damages pensioners is a roaring rate of inflation such as we had during the latter part of the 1970s. Opposition Members cannot disguise the extent to which pensioners' average real incomes have risen faster under this Government than under the previous Labour Government, principally because the rate of inflation has been so much lower.

Why does not the Secretary of State understand the bitter resentment felt by so many pensioners at the way in which they are treated? Is it not the case that if pensions had been increased in line with earnings—an arrangement which was discontinued in 1980—married pensioners would be almost £21 a week better off and single pensioners £13 a week better off next April? Why should Britain's pensioners be among the poorest in the Common Market?

I do not agree with the hon. Gentleman's proposition for reasons that relate to the absurd experience of what happened when the previous Labour Government pursued those policies. At the same time, and partly as a result of those policies, they generated a rate of inflation which seriously damaged pensioners and which meant that their incomes rose less fast in real terms than they have under the present Government.

I am glad that my right hon. Friend mentioned that point. Many retired people in my constituency and in the constituencies of my hon. Friends face difficulty, because they thought that they had made provision for their retirement through savings or modest occupational pension schemes. They found that inflation in the 1970s, under a Labour Government who could not even keep the promises that they made to pensioners, destroyed those savings. I hope that my right hon. Friend will continue his efforts to ensure that pensioners, particularly those in need, continue to receive better benefits.

My hon. Friend is absolutely right. His point is encapsulated in the fact, which is becoming increasingly well known, that whereas pensioners' income from savings has risen by 64 per cent. under the present Government, it fell by 16 per cent. under the previous Labour Government. Not all pensioners have the advantage of having savings. It is precisely for that reason that last October we directed so much additional help to the older and more disabled pensioners who are least well off.

Will my right hon. Friend confirm that when the hon. Members for Bolsover (Mr. Skinner) and for Walsall, North (Mr. Winnick) reach retirement age, they will be entitled, like the majority of people who have employment pensions provided for them, to a generous pension? Does he agree that by concentrating some £200 million last October on the poorer pensioners, the Government are tackling the problem the right way rather than trying to give everyone, including the fairly well off, a much smaller amount?

I very much agree with my hon. Friend. I am grateful for the way in which he put his point.

The Secretary of State mentioned his genuine concern for pensioners. Does he accept that many elderly and handicapped people still face the choice between heating and eating? Would not one way forward be for the Government to provide an allowance for the heating needs of the elderly during the winter months rather than rely on the strange system that we have now, which does not have a good level of uptake?

Perhaps the hon. Lady has forgotten that when the changes were made to the old supplementary benefit system and when the current income support system was introduced, the value of heating additions was much reflected in the premiums paid to precisely those groups of pensioners about which she is rightly concerned. In other words, they are reflected in the regular weekly payment of benefit in the form of premiums for pensioners and disabled people.

Why is it that the 2 million poorest pensioners who depend solely on state benefits have had a zero real increase in their pensions under this Government in the Thatcher decade, while the parliamentary pay of Cabinet Ministers has been increased in real terms by no less than 79 per cent? Why is it that Cabinet Ministers have looked after themselves so handsomely, while reneging on their commitment to enable the poorest of pensioners to keep pace with rising living standards?

I do not accept for a moment the way in which the hon. Gentleman advanced his argument. He knows well that we have adhered faithfully to our commitment to increase the basic retirement pension in line with prices year in, year out, and we shall do it again next April. As I have said at least twice in this exchange, we acted last October to give significant extra help to about 2·5 million of the older and more disabled pensioners who are least well off. That reflects our concern and determination to continue doing whatever we can to help.

Unmarried Mothers


To ask the Secretary of State for Social Security if he will make a statement about the level of social security payments made to unmarried mothers.

The Parliamentary Under-Secretary of State for Social Security
(Mrs. Gillian Shephard)

At May 1988, the annual cost of income support for families headed by an unmarried lone mother was estimated to be about £700 million. Information by marital status on other benefits paid to those families is not available.

Has my hon. Friend anything to say about recent newspaper reports that payments to single mothers are now in excess of £1,000 million? The traditional family has no resentment when it comes to maintaining mothers who have been deserted by their husbands or treated badly by them, but what of those who leave their husbands for no good reason? What about those who have never been married, who have children? Is it not true that a young woman having a baby need not work until the child is 16 years of age, is entitled to free council housing accommodation, and costs other people about £70,000 to bring up her child until the age of 16?

The Government are concerned about the increasing numbers of lone-parent families, including unmarried mothers, and their reliance on benefit. We are constantly examining the benefit arrangements for them and those for other groups. It is important that the benefit system should not create incentives for lone parenthood or for dependence on benefits, but it should provide support for those who are in need. Of course, fathers should pay maintenance for their children, whether or not they are married to their mothers. The Department takes action to try to secure maintenance and it is considering actively how to make its procedures more effective. I remind my hon. Friend that decisions on maintenance payments are made by the courts.

Why do the Government continue to stir up apathy on this issue? Are the Government aware that the proportion of young single mothers drawing benefit who gain help from the fathers has halved during the past 10 years? When will the Government bring forward new plans for the House to discuss, so that mothers can make over maintenance orders to the state, with the state taking responsibility for collecting the money and paying it regularly, weekly or monthly, if the mothers want that? When are we to hear about plans on those lines? They would reinforce parental responsibilities and increase the freedom of single mothers.

As always, the hon. Gentleman makes an interesting contribution to the debate. He is, at least partly, describing what is happening in Australia. The findings from a recent visit to Australia are being closely studied by my Department. I repeat that the Department is continuing actively to review how to make its own recovery of maintenance payments from fathers more effective. I remind the hon. Gentleman that the Department has commissioned some independent research, involving lone parents who are served by 44 local offices, to examine the motivations and perceptions of lone parents. When the research is completed, the results will he fully examined.

Will my hon. Friend consider taking as many increased powers as may be necessary to pursue fathers through the courts and, if necessary, genetic testing to prove paternity where there is doubt?

The measures that my hon. Friend describes are more suitable for consideration by the Lord Chancellor's Department.

Will the Minister give an assurance that the Government will not adopt a punitive attitude to lone parents? After all, a significant number of the members of the Cabinet have created lone parents themselves—[HON. MEMBERS: "Oh!"] That is true. We heard the comments of the hon. Member for Stockport (Mr. Favell), and Conservative Members should not have double standards. Is the Minister aware that the number of parents dependent on benefit has grown under the present Government because their benefits policies and cuts have created many poverty traps? Many lone parents cannot take a job because that would reduce their income. Is not the answer to restore child benefit to a proper level, to implement a national minimum wage and to allow lone parents to offset child care costs when they want to work? The Government are trapping lone parents into dependency on benefit, which is not what those parents want—and it should not be allowed.

Nothing that I have said in reply to questions so far has suggested that the Department wants to take a punitive attitude towards lone parents. It simply does not want to create perverse incentives. I remind the hon. Lady that incentives for lone parents to work already exist within the benefits system. There is an earnings disregard within income support, the same adult credit is given for single lone parents as for couples in family credit. and an increase in the housing benefit earnings disregard from £15 to £25 was recently announced.

Will my hon. Friend take it from me that many of my married constituents who pay to bring up their own children resent additional taxation to pay for bringing up other people's children? Can she state the amount of subsidy to local authorities through the rate support system because of the number of unmarried mothers in their areas? That situation is highlighted in my constituency, where Middlesbrough council receives millions of pounds more than Langbaurgh council, solely because of the number of one-parent families that Middlesbrough must support.

I have already mentioned the Government's concern at the increasing number of all lone-parent families. Matters relating to the rate support grant are for my right hon. Friend the Secretary of State for the Environment.

Social Fund


To ask the Secretary of State for Social Security if he will list the cash limit for social fund loans and grants from Department of Social Security offices at Finsbury park and Highgate for 1989–90 and the amount expended by 18 December in the current year.

Information on social fund allocations to local offices is placed in the Library. Finsbury park and Highgate are included. That information is updated monthly.

The Minister has not given much information that would be of help to anyone. Why is it that in the case of Finsbury park social security office, of the 139 applications for community care made grants during December, 31 were allowed but 61—nearly half—were disallowed, and the remainder carried forward to the next month? That has been happening month after month in the two offices named in my question. Will the Minister put a stop to the practice of carrying forward applications from one month to another so that applicants have to wait longer and longer for desperately needed community care grants? No increase in the cash limit is made available the following year, so in reality the amount of money available for grants to people in my area, as in many other areas of inner London, decreases year on year. People desperately in need of community care grants cannot obtain them, and they suffer as a consequence.

I hope that the hon. Gentleman will avail himself of the information that has been placed in the Library to help all right hon. and hon. Members assess the situation at their local social security offices. Some applications in any local office will inevitably slip from one month to the next if they are made late in the month. I am surprised that the hon. Gentleman did not mention in his supplementary question that an extra £3 million was allocated recently to some local offices under particular pressure. Highgate office was one of the beneficiaries.

Can my right hon. Friend tell me whether anyone has applied for a social fund loan at the Finsbury park office, who has contracted AIDS as a result of an operation or a blood transfusion, but who is not a haemophiliac? If so, will he put those people into the same category as haemophiliacs, and ensure that they receive the welcome assistance that is now being given to haemophiliacs?

I suspect that my hon. Friend will not expect me to know whether there are such applications at the Finsbury office, but I shall consider the matter that she raised.

Would not the position in Finsbury park, Highgate and other offices be massively improved if the Government allowed local offices, as they collect back loans, to keep them to add to the social fund?

Of course, the rate of recovery of money from loans affects the national kitty, and resources available nationally. The allocation to local offices is best met by an assessment by us, at the centre, the likely burden, and of the level of need in the local area. I should be reluctant to link the rate of recovery specifically to the resources available in local offices, as that might not reflect the level of need as well as the present system of allocation does.

Child Benefit


To ask the Secretary of State for Social Security how many letters he has received supporting the decision not to uprate child benefit in the coming year.

The decision not to uprate child benefit does not appear to be terribly popular. Does my right hon. Friend agree that because of the low take-up of means-tested benefits compared to child benefit, the freezing of child benefit for a three-year period hits poorer families particularly hard?

No, I do not agree with that. It is well known that, because of the way in which the system works, an increase in child benefit does nothing for the least well-off families and for those on income-related benefits. What we have been able to do with some of the resources made available is to improve the benefit for the least well off, and for families that includes a quarter of the nation's children. We must recognise that no conceivable increase in child benefit could do as much for low-income families who are in work as family credit now does.

Does the Secretary of State agree that he was one of the supporters of child benefit? What has changed? How can he come to the Dispatch Box now and defend the freezing of child benefit?

The question whether one is a supporter of child benefit is different from the question whether to increase child benefit as opposed to the other steps that could be taken with the money available. What I was able to do, as I set out in the uprating statement, was to give far more help to the least well-off families than an increase in child benefit would have done, and it did far more for disabled people and families with disabled children.

I applaud my right hon. Friend's intention to help the least well off. Will he assure the House that more than 50 per cent. of those who are due to receive benefits under the new system are getting them?

I assure my hon. Friend that the take-up campaign that we waged last spring was extremely effective in raising the number of people receiving family credit, and I welcome that. The number increased by some 40,000 to about 320,000, and we are currently running a further advertising campaign, which I hope will contribute to making the benefit as effective as we would like it to be.

Does the Secretary of State accept that child benefit is a universal benefit, with almost 100 per cent. take-up, and that it is paid to the mother? It is often the only income that she has to herself, of right. Why does the right hon. Gentleman not say, even at this late stage, that he was wrong to cave in to the Prime Minister's Victorian attitude, and that he will uprate child benefit?

Family credit is also normally paid to the mother. The average payment of family credit is now £25 or £26 a week, and over a third of the payments are more than £30 a week. There is no doubt that family credit does more for low-income families in work than child benefit could.



To ask the Secretary of State for Social Security what was the cost of sending greetings telegrams to centenarians in 1988, 11 and 16 years ago; and if he will make a statement.

I am pleased to say that in 1988 the Department sent a total of 2,142 telemessages to centenarians at an estimated cost of about £11 each. The cost includes the message itself and local and national staffing costs. The cost of sending telegrams in 1972 and 1977 is not readily available; however, 1,283 were sent in 1972 and 1,510 in 1977.

As centenarians already receive a telegram from the Queen, will my hon. Friend gladden that special day in the lives of those who achieve their century by offering them a choice between the departmental telegram, a certificate of age, a bottle of champagne, whisky, brandy or parsnip wine and a tin of House of Commons fudge?

My hon. Friend lent a happy note to this first Question Time of the New Year. Today is the birthday of seven centenarians, and given his obvious good spirits my hon. Friend will no doubt wish to join me in congratulating them. As for his specific suggestions, may I make a positive suggestion to him? If I give him the names and addresses of those seven centenarians, he may wish to conduct a straw poll to establish whether they would prefer a certificate of age, a bottle of whisky or brandy or—in particular—some House of Commons fudge!

Mr. Speaker—[HON. MEMBERS: "Declare your interest."] Yes, I declare my interest. I am retiring at the next general election, but that is another matter.

I ask the Minister to ignore the hon. Member for Ealing, North (Mr. Greenway): all that he is on about is grabbing money. The people who receive the telegrams are entitled to them. The hon. Gentleman should be pointing out that the welfare state, is responsible for the fact that people are living longer. That lot over there are trying to destroy the welfare state, but when we are sitting where they are we shall put that right, and defend it.

Let me merely say to the hon. Gentleman, who has made his customary interesting intervention, that the increase in the number of congratulatory telemessages speaks for itself, demonstrating the Thatcher achievements in welfare.

My hon. Friend will know that the oldest person in Britain lives in my constituency. She is 112½, and has received more telegrams than anyone else; she enjoys and looks forward to receiving them. May I suggest that my hon. Friend does as I do, and takes her a bottle of whisky every time she has a birthday?

I am sure that my hon. Friend the Member for Ealing, North (Mr. Greenway) will take the advice of his hon. Friend.

As there is a precedent for the Department of Social Security to send people telegrams on special days in their lives, will the Minister consider extending the principle to those who reach their 16th birthdays without jobs, YTS places or entitlement to social security benefit? Will she consider the report published today by the Family Policies Study Centre, which has found independently that many of those youngsters face destitution because of the Government's evil decision to withdraw benefit entitlement? Will the Government please repent of that decision, which is causing poverty and hardship for so many 16 and 17-year-olds on the streets of our cities?

I congratulate the hon. Gentleman on his ingenuity in asking such a supplementary to a question about centenarians. I remind him that there is no need for any 16 or 17-year-old to be without income: each and every one is entitled to a YTS place and the accompanying payment.

Couples (Benefits)


To ask the Secretary of State for Social Security what assessment he has made of the financial effect on couples who live apart for employment or educational reasons, of their treatment under the income support, family credit or housing benefit regulations as if they were living together.

The financial effect on individual couples will vary according to individual circumstances. As a general rule, as long as both partners normally live in the household, temporary absences are ignored for the purposes of entitlement to income-related benefits.

Does my right hon. Friend agree that in a small minority of cases the rule that he has just outlined may lead to one family having two sets of living expenses that often have to be paid for out of one set of benefits? A reduction in a particular benefit can bring that family way below the poverty line, purely because one member of the family has decided to seek training or education as a means of bettering himself or herself.

I am not sure that my hon. Friend is absolutely right about training and education. There are special housing benefit arrangements for couples who have to live apart because one of the partners is a student or is on a training course. In those circumstances, housing benefit can be paid for an unlimited period for both homes.

Does not the Secretary of State accept that there are some anomalies? If one of the partners has to undergo education or training in order to try to return to employment, on many occasions the couple loses money. Will he undertake to examine the anomalies and ensure that that deterrent to either party returning to education or training is ended and that they do not lose money?

I have already referred to one aspect of the way in which the system seeks to take account of that kind of problem. The hon. Gentleman has made his point fairly and reasonably. I accept that this is a difficult area. These cases are relatively rare and the circumstances can be quite complicated. If there is a particular case that the hon. Gentleman would like to draw to my attention, I shall certainly have a look at it.

Social Fund


To ask the Secretary of State for Social Security what is the current backlog of social fund loans and grant applications in Department of Social Security offices in London.

The latest information available is for November. In London as a whole, 8,500 applications were brought forward as uncleared from October. These were made up of 2,400 community care grant applications and 6,100 budgeting loan applications. There were no outstanding crisis loan applications.

The Minister surely knows that the Government are saving a vast amount of money under the new system, as opposed to the old single payments system. It is totally unacceptable that such a backlog should be allowed to develop. Will he please look again at the possibility of introducing more flexibility into the system as a whole? It is ludicrous that certain offices underspend their social fund budget, although applications are outstanding. As that money cannot be carried over to the next financial year, it is lost. There should be some means of transferring money between offices so as to match overspend and underspend. I ask the Minister to look again at the system to see what flexibility can be introduced.

We do, of course, monitor very carefully the social fund. It is worth pointing out that the figure that I gave to the hon. Gentleman means that, on average, 35 community care grant applications and 97 loan applications in London's local offices were carried forward. If one bears in mind that in the case of some of those loan applications the client or the applicant had already been offered a loan but had not yet accepted it, that is not too bad a record in all the circumstances. However, as I have already said, we monitor the social fund very carefully.

Will the Minister look carefully at the report that has been sent to him by the leader of Southwark council—a report which received all-party support in Southwark—requesting a meeting but highlighting cases where loans had been requested but grants had been refused? Is not the system far too inflexible? Many people are turned away when they are totally impecunious. They are told that they cannot have money for a cooker, or furnishings and the rest, so they keep on coming back, hoping, believing and expecting that there must be something in the system that will provide them with the money with which to survive. At the moment, much of the delay is caused because people have to return for money since they have none, on account of the system not allowing them to have grants when they need them.

The vast majority of refusals under the social fund are because the applicants do not meet the basic eligibility criteria. Under 10 per cent. of the refusals relate to insufficient priority being accorded to the application; less than 2 per cent. of refusals are because it is judged that the individual cannot pay. In those circumstances, money, advice or other guidance is given to the individual concerned. I shall of course look carefully at what Southwark is sending me, but it is worth saying that in 218,000 cases where loans have been refused, community care grants have been given instead. However, those loan refusal cases are still included in the statistics.

Is the Minister aware of the independent report by the National Association of Citizens Advice Bureaux which says that 49 per cent. of pensioners' applications to the social fund were refused and that the applications of up to 80 per cent. of young persons and unemployed people were refused? Is he further aware that among those refused was a young woman who was due to have a baby in two days' time? She was refused a grant for a bed on the excuse that she could sleep on the floor, a disabled couple were refused a grant for a cooker on the ground that they could eat out, and a crisis loan was refused to a young man on the ground that he could eat out in soup kitchens? Is this a success?

I shall study with interest what NACAB has produced. The report was a small snapshot of a limited number of people who have been in touch with citizens advice bureaux. Moreover, the survey was taken in the first year of the social fund's operation, which I do not believe is typical of its operation since then. Our figures suggest that, far from 55 per cent. of applications being refused, 39 per cent. are refused. That compares favourably with the level of refusals which were 42 per cent. in the last year of the single payments scheme.

Social Security Offices (Sussex)


To ask the Secretary of State for Social Security if he will make a statement about staffing levels in local social security offices in Sussex.

Staffing levels in local social security offices in the Department are calculated using an agreed complementing system which aims to match staffing to work load. Under the system, staffing resources are allocated to regional offices where local circumstances are taken into account before these resources are distributed individually to local officers.

I appreciate the existence of that formula, but is my hon. Friend aware that, too often, too little attention is paid to the difficulties confronted by staff in local offices who have to introduce new benefits, use new methods, co-ordinate with local government and overcome difficulties with upgrading their offices? Can she build into the equation a greater appreciation of that, and the need to delegate to managers so that they can manage more effectively?

There have been difficulties at the Lewes local office during the year. Additional help in the form of casual staff, overtime, regional reserves and staff on detached duty has been made available to offset the shortfall. A new complementing system is to be introduced in April 1990. It will take account of the point raised by my hon. Friend, by being more sensitive to local office needs and taking account of local circumstances. I remind my hon. Friend that an additional £25 million was made available during the year to help local offices with their increased workload.


Company Fraud


To ask the Attorney-General when he next expects to meet the director of the Serious Fraud Office to discuss company fraud; and if he will make a statement.

I shall meet the director of the Serious Fraud Office shortly to discuss matters of departmental interest.

Will the Attorney-General discuss with the director the Ferranti case and the fact that the directors allowed a £250 million sting to take place right under their noses? Does the Attorney-General expect us to believe that that happened without any fraud being involved?

Will the Attorney-General also discuss with the director the £4,000 that went through the checkout that resulted in a young mother and her baby finishing up in prison for six months? If the Attorney-General wants some equality in Britain, why does he not take Judge Pickles off cases involving young black women and their babies and stick him on City cases and let him loose there?

With his well-known concern not to anticipate any inquiry by jumping to a conclusion, the hon. Gentleman would not want me to anticipate the result of an investigation that has been put in train by the director of the Serious Fraud Office and the Director of Public Prosecutions into matters which, among other things, are connected with Ferranti, to which the hon. Gentleman's question relates.

Is my right hon. and learned Friend at all concerned about the rather extraordinary delay in the inquiries being made by the Serious Fraud Office into matters raised by the House of Fraser report?

Is he worried about the Department of Trade and Industry's decision not to refer that unpublished report to the Monopolies and Mergers Commission, which means that even if serious fraud is identified and proved, there is nothing that he or anyone else can do about that company's assets?

The previous Secretary of State for Trade and Industry told the other place that he was very anxious to publish the report. I am certain that exactly the same is true of his successor. Equally, however, my hon. Friend will know of the affidavit evidence sworn by the two directors of the Serious Fraud Office and the Director of Public Prosecution to the effect that they believed that the interests of justice required that publication of the report should be held up pending investigations which are in train. The investigations have not been limited to this country but have had to take place overseas. It is my earnest hope that they will be completed shortly and a decision taken as to their publication.

Is the Attorney-General aware that if a small-time punter provides false information to obtain a loan or a job, a charge of obtaining a pecuniary advantage by deception will often result? What is the difference in principle between that and giving false information to the European Commission to get a merger clearance for BL, except that the pecuniary advantage is much greater and will he be asking the director of the Serious Fraud Office to look into that?

I am afraid that most uncharacteristically the hon. Gentleman is jumping to conclusions. My right hon. Friend the Secretary of State for Trade and Industry has said that he and his Department will be happy to answer any questions from the Commission about the sale of the Government shareholding in the Rover group. Discussions at an official level are continuing.

Legal Aid


To ask the Attorney-General what estimate he has made of legal aid payments in the current financial year; and how much was paid (a) five and (b) 10 years ago.

The provision for all legal aid expenditure in the current Supply Estimates is £557 million. Five years ago expenditure was £273 million and 10 years ago it was £99 million.

I congratulate my right hon. and learned Friend and his Department on that substantial increase. Can he confirm that many more poor people are covered in legal cases by that increased expenditure, and can he explain why solicitors' and lawyers' charges are so high? Why did the cost of the Aldington case come to £1 million?

I am grateful to my hon. Friend for his recognition, which deserved to be more widely understood, of the large increases in the money made available for legal aid in the past 10 years. Referring to the costs in legal aid cases, the fees paid to solicitors and lawyers vary on a scale appropriate to the weight and experience necessary for the lawyer or lawyers dealing with the case in question. The Aldington case, which was an unusual case, was a libel case and legal aid is not available for libel. However, the number of people receiving help from legal aid in the past 10 years, judged by the number of legal aid applications granted, has risen from fewer than 200,000 in 1979–80 to some 259,000 this year.

Notwithstanding the figures that the Solicitor-General has just given, compared with 10 years ago legal aid is now available to 14 million fewer people. Poor people have been discriminated against. The less money they have the less chance they have of obtaining justice. That is the situation we are facing in 1990.

No. I do not think that the hon. Gentleman's assumptions are correct, although I know where they come from. He will also have recognised and no doubt welcomed the announcement by my noble and learned Friend the Lord Chancellor providing extra availability of legal aid, particularly in personal injury cases and cases involving children and pensioners which are likely to increase the numbers by up to 10 million people.

Is my right hon. and learned Friend aware that there is also considerable disquiet about the working of the scheme among the legal profession—in which of course I declare an interest—particularly about the rate of remuneration for legal aid? The delays in payment and the circumstances in which it is granted are resulting in a reduction in the number of solicitors who are willing to carry out legal aid work. Will he consider what effect that is likely to have on the Government's commitment to improved access to the legal system for poorer people in society?

Over the past year and a half, I have been made well aware of the concerns about the matters that my hon. and learned Friend raised. He will recognise that considerable advances have been made in improving rates of remuneration. The Legal Aid Board is urgently tackling the question of promptness of payment and the other administrative matters which are important if legal aid is to be given effectively.

Security Services


To ask the Attorney-General if he was consulted over the publication of the book relating to the security services written by Mr. John Day.

I understand that Mr. Day, in accordance with his duty, sought and obtained authority to publish his book.

Will not Mr. John Day, who is a former senior official of M15, recommend in his book independent oversight of the security services along lines that have been repeatedly rejected by the Government? Is the Attorney-General aware that we should at least be pleased that, unlike the Wright farce, there will be no objection to Mr. Day publishing his book, and that hence there will be a considerable saving to public funds?

I have not read Mr. Day's book, but any question on the oversight of the security services should be put to my right hon. and learned Friend the Home Secretary. I take issue with the hon. Gentleman's description of the proceedings brought by the Government on the publication of Mr. Wright's book, "Spycatcher". I recommend that he reads a note written by Professor Birks of Oxford university in the current edition of the Law Quarterly Review, in which he describes the "battle", as he put it, to suppress the book as one in which the Government were victorious on all points of principle.

Serious Fraud Office


To ask the Attorney-General when he next meets the director of the Serious Fraud Office, what matters he will discuss.

I thank the Attorney-General for his most courteous letter in answer to my request that Law Officers might help hon. Members serving on the Property Services Agency and Crown Suppliers Bill. Will he reflect on the position of Coopers and Lybrand and discuss with the Serious Fraud Office whether some of those who have been commissioned to write a report for the Government should become involved in a potential management buy-out of the Crown Suppliers? Is that not terribly near to insider trading, and should not the Attorney-General's Office consider the ethics involved?

I am grateful for the kind words with which the hon. Gentleman began his supplementary question. Matters concerning insider dealing are, in the first instance, for the Secretary of State for Trade and Industry, whose Department is the prosecuting Department for the offence known as insider dealing. I shall consider the matter that the hon. Gentleman raised and draw it to the attention of my right hon. Friend the Secretary of State for Trade and Industry.

Overseas Development



To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on multilateral and bilateral aid to Cambodia.

Following the very useful visit of two British officials to Cambodia in December, I have decided to provide a further £1 million to multilateral agencies for their programmes inside Cambodia in 1990–91. There has been a further meeting with non-governmental organisations' representatives in London to discuss new project proposals, and I have let the Voluntary Service Overseas know that we should be happy to support the opening of a volunteer programme in Cambodia.

Can the Minister be sure that that aid will not go indirectly to the Khmer Rouge? There is growing concern among hon. Members about the escalating war in Cambodia. Do not recent statements by the non-Communist factions of the coalition Government of Democratic Kampuchea make it clear that they are now fighting in collaboration with the Khmer Rouge? Is it not, therefore, high time that the Government ceased all direct aid to the non-Communist resistance if they are to comply with their declared policy of giving no aid directly or indirectly to the Khmer Rouge?

I assure the hon. Gentleman that we have been given repeated assurances by the United Nations Border Relief Organisation that British aid is not being used by the Khmer Rouge. In the light of recent events, I again sought and received confirmation of the position from UNBRO. I join the hon. Gentleman in his concern about the war and the reported happenings over the past few days. We want to see a political solution and free elections, and we are working for that with the interested parties, especially the other permanent members of the United Nations Security Council. There is such confusion at times about what the three aspects of the resistance movement are saying that I do not feel that I can respond to the hon. Gentleman's last question, but he can be in no doubt that we will not give, have not given and have no intention of giving any support to the Khmer Rouge.

I congratulate my right hon. Friend on her prompt response to the report by the two diplomats who visited Phnom Penh and on the provision of the extra £1 million. I beg her to use her considerable influence with her colleagues in the Foreign Office to continue to search for a solution to the war. There is no point in an enlarged programme for Cambodia unless the war ends. We read in today's newspapers of the bombardment of Battambang, the second largest city in Cambodia. There is a desperate need for a new road from Phnom Penh to Battambang, but there is no point in constructing it until the war ends. Will my right hon. Friend use her influence with the Security Council to achieve that end?

I thoroughly agree with my right hon. Friend that unless a lasting political solution is found, there is no way in which the aid, which we will willingly give, can be properly used for the benefit of the people. We will continue the efforts that we have been making in recent months.

I welcome the Minister's announcement of additional aid to Cambodia. Does she recognise the widespread concern of the British people on the issue of Cambodia and Government policy? Is she aware that a petition was handed in today at the Foreign Office by Oxfam supporters and an all-party delegation which voiced their worry and asked the Government to reconsider their policy? We all agree that a political solution should be found. Can the right hon. Lady give us a categorical assurance that United Nations Border Relief Organisation food aid, to which we all contribute, is properly monitored? She has received reports from Oxfam supporters who have seen what is happening in the Khmer Rouge camps on the Thai border. Some of that food is parcelled up by people in those camps and goes directly to the military, including the Khmer Rouge, who are fighting inside Cambodia against the Cambodian Government.

I understand the hon. Lady's anxiety about the potential issue which was reported to me by Frank Judd of Oxfam at a meeting with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and me on 14 November. We have repeatedly gone to UNBRO for these assurances. I shall not be entirely satisfied as long as hon. Members and the British people remain concerned about this matter. I shall continue asking for assurances and do all I can to ensure that the food intended for families and ordinary people in Cambodia is not sent to the Khmer Rouge. But I am here in London—not in the camps or in Cambodia—and I cannot say hand on heart that none of the food has gone through.

I was aware of the petition that the hon. Lady, my hon. Friend the Member for Broxtowe (Mr. Lester) and the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) delivered this morning to the Foreign Office. One can have endless petitions, but a political solution is needed. With the help of United Nations Security Council members, I hope that we can bring that about as soon as possible.

Commodity Prices


To ask the Secretary of State for Foreign and Commonwealth Affairs what policy in respect of commodity prices is adopted by United Kingdom representatives to the Lomé convention.

The Lomé convention has no direct role in commodity pricing, but helps commodity dependent African Caribbean and Pacific (ACP) countries through aid for improved production and diversification. ACP states can also get help under the Stabex scheme, if they face shortfalls in export earnings from certain agricultural products, and under the Sysmin scheme if they face shortfalls in production or earnings from a list of minerals.

Does the Minister accept that the attitude of the EEC and of North American countries towards commodity prices has been a major contributory factor in the debt crisis in much of the world? Does she agree that the latest round of Lomé convention prices on exports from ACP countries has resulted in virtually the lowest real terms prices ever achieved by those countries? They are worried about the way in which they have been treated by the EEC. Is the right hon. Lady aware that exports from ACP countries to the European Community are at their lowest level for 25 years? Those countries and many of us are worried about the growing crisis faced by the poorer countries because the richer industrial countries are closing their markets to them and forcing them into debt and low commodity prices.

The answer to the hon. Gentlemen's first question is no. The answer to his second is that the Lomé convention contains no provision on commodity prices or participation in international commodity agreements. The three main areas of co-operation in commodities matters in the convention are the national indicative programmes, Stabex and Sysmin and the consultations. It is through the national indicative programmes that we seek to help countries that are heavily commodity dependent. Resources for diversification, including aid for processing, marketing, distribution and transport, are considered when individual country programmes are drawn up, and that will be happening this year.

The best way in which to help commodity-dependent countries is to enable markets to work efficiently and openly and to strengthen and restructure the countries' economies. That we are doing, not only through the EEC but directly.

How on earth can it help to have economies working more openly when the EEC is spending £220 million every week simply destroying food and dumping it at crazy low prices, with the sole consequence of spreading death, starvation and destruction throughout the Third world? Given her responsibilily for overseas development, will the Minister make it abundantly clear that she will do everything in her power to fight against this dreadful policy of dumping food on the Third world at crazy low prices and spending lots of our taxpayers' money on dumping high-tar tobacco in places such as Africa, which in my view, is an affront to the civilised world.

My hon. Friend knows that I have always been against subsidising the overproduction and dumping of food. I hope that he realises that Lome agreement EDF VII, which represents a 46 per cent. increase on EDF VI, gives the largest ever United Kingdom commitment to the Lomé countries. We are doing our best—through the EC programme and bilaterally, through the economic reform programmes—to help the countries, especially those that have been commodity dependent. Nevertheless, I agree with my hon. Friend that dumping excess provision created in Europe is no way to solve the problem.

But, specifically, does the Minister accept the importance of bananas to the economies of the West Indian islands, and the threat posed by the ending of the banana protocol in 1992? Does she recall the pledge of the Prime Minister in Jamaica in July 1987 to fight to protect their position? Will she say how far the Government have been able to fulfil that pledge?

That has nothing to do with commodity prices. The hon. Gentleman will know, however, that it was the British Government who fought hard for the banana producers during the recent negotiations on Lomé. The response that I have had from the banana producers has been one of gratitude for what Britain was able to achieve under the EDF discussions and the Lome convention.

Ambulance Dispute

3.32 pm

On a point of order, Mr. Speaker. Can you make it clear to me, to the House and to anyone else who may read about or watch events here that you have had no request from the Secretary of State for Health to make a statement this afternoon, at the start of the new year's parliamentary business and in the 18th week of the ambulance dispute? It is now quite clear—and not only in my area—from statements by leading doctors and medical personnel that people are dying because of the Government's pigheadedness in refusing to settle the dispute.

I can confirm that I have no notification that there is to be a statement about that today.

Bills Presented

Raoul Wallenberg (Memorial)

Mr. David Amess, supported by Sir Bernard Braine, Mr. Ivan Lawrence, Mr. Greville Janner, Mr. Michael Latham, Mr. David Alton, Mr. Peter Archer, Mr. David Atkinson and Mr David Sumberg, presented a Bill to enable the Secretary of State for the Environment to set aside land, not being Crown land, within the Greater London area, for the erection of a permanent memorial to Raoul Wallenberg: And the same was read the First time; and ordered to be read a Second time on Friday 30 March and to be printed. [Bill 38.]


Mr. Edward Leigh presented a Bill to reform the law governing licensed premises: And the same was read the First time; and ordered to be read a Second time on Friday 20 April and to be printed. [Bill 39.]

Sunday Trading

Mr. James Couchman presented a Bill to reform the law governing retail trade on Sundays: And the same was read the First time; and ordered to be read a Second time on Friday 27 April and to be printed. [Bill 40.]

Road Traffic Regulation (Speed Limits)

Mr. John Bowis presented a Bill to amend the law relating to speed limits on roads and motorways: And the same was read the First time; and ordered to be read a Second time on Friday 11 May and to be printed. [Bill 41.]

Indecent Displays

Mr. David Sumberg presented a Bill to amend the law relating to the display of pornographic material in public places: And the same was read the First time; and ordered to be read a Second time on Friday 4 May and to be printed. [Bill 42.]

National Service

Mr. Tony Marlow presented a Bill to enable the Secretary of State for Defence to introduce a scheme allowing young people between the ages of 16 and 21 years to volunteer to fulfil a period of national community service for a period not exceeding 18 months: And the same was read the First time; and ordered to be read a Second time on Friday 6 July and to be printed. [Bill 43.]

Performing Animals

Mr. Andrew Mitchell presented a Bill to amend the law governing public exhibitions by performing animals: And the same was read the First time; and ordered to be read a Second time on Friday 30 March and to be printed. [Bill 44.]

Reform Of The House Of Lords

Mr. Graham Allen presented a Bill to abolish the House of Lords as presently composed and to provide for a new directly elected membership based on parliamentary constituencies: And the same was read the First time; and ordered to be read a Second time on Friday 26 January and to be printed. [Bill 37.]

Horses (Protective Headgear For Young Riders)

Mr. Harry Greenway, supported by Sir Bernard Braine, Mr. Iain Mills, Mr. Stuart Randall, Miss Ann Widdecombe, Mr. Ronnie Fearn, Mr. Michael Colvin, Mr. Robin Cook, Mr. Henry Bellingham, Mr. John Carlisle, Mr. Terence L. Higgins and Mr. Gerald Bermingham, presented a Bill to secure the wearing of protective headgear by minors while horse riding; to prescribe offences and penalties; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 2 February and to be printed. [Bill 45.]

Caldey Island Bill


That the Caldey Island Bill be referred to a Second Reading Committee— [Mr. Greg Knight.]

Orders Of The Day

Pensions (Miscellaneous Provisions) Bill

Order for Second Reading read.

3.35 pm

I beg to move, That the Bill be now read a Second time.

The Bill is the first since 1975 to make changes to the statutory framework for public service superannuation provided by the Pensions (Increase) Act 1971 and the Superannuation Act 1972. The present system of public service superannuation has stood the test of time well and there is no need for major changes. However, there will always be a need from time to time to make minor adaptations and alterations. We have to make such changes now to meet our Community obligations on equal treatment in occupational pensions.

The Bill also provides an opportunity to make other detailed and technical changes of a tidying-up nature. I do not think that there is anything in this largely technical and tidying-up Bill that needs to be controversial along party-political lines, and it is in that spirit that I commend it to the House.

My hon. Friend has referred to our Community obligations. Can he reassure the House that the Bill is the result of a decision by Her Majesty's Government and not by any folk in Brussels?

The Bill is the result of a direct decision taken a long time ago by the House. I assure my hon. Friend that there is nothing in it that would in any way prevent him from having the early dinner that he so richly deserves.

Until the 1970s the rules of public service superannuation schemes were generally contained in primary legislation. Public service pensions were increased to compensate for inflation on an ad hoc basis by various Pensions (Increase) Acts passed between 1920 and 1969. In 1971, the Pensions (Increase) Act provided for public service pensions to he regularly increased by statutory instrument. The Act was amended in 1972 and 1974 to lower the minimum qualifying age for pensions increase from 60 to 55 and to provide for all pensions paid to widows of scheme members to be increased. The system was adapted by the Social Security Pensions Act 1975 to allow for the introduction of the state earnings-related pension scheme and contracting out by public service pension schemes.

The Superannuation Act 1972 provided for local government, teachers and National Health Service schemes to be contained in regulations and gave the then Minister for the Civil Service the power to make, maintain and administer Civil Service pension schemes. No major changes to that Act have been made since then, but similar provisions were made for the police pension scheme by the Police Pensions Act 1976.

The Bill is essential to meet the requirements of an EC directive on equal treatment. Occupational pension schemes have traditionally operated on the old-fashioned assumption that women are dependants and that men are bread winners. That assumption is no longer valid and the Bill provides for men and women pensioners to be treated the same regarding the increase in their pensions under the Pensions (Increase) Act.

Will those working for the Property Services Agency receive the same benefits as other civil servants?

Yes, under this legislation. As my hon. Friend is aware, special measures must be taken at the time of privatisation, but at the moment all public servants are treated in the same way under the terms of this legislation.

As I have said, the Bill provides for men and women pensioners to be treated in the same way with regard to the increase in their pensions under the Pensions (Increase) Act 1971. The Bill also makes other minor changes to the legislative framework for public service pensions. It does not make major amendments to the existing law, and we see no reason to make any changes now, because there is no longer any need to use primary legislation to amend the rules of most public service pension schemes. Regulations made under the relevant statutes can cover most changes that we may wish to make. We also consider the existing statutory arrangements for public service superannuation to be generally satisfactory. Of course, there will always he individual grievances about pension schemes and their administration. That is inevitable. Everyone would always like higher benefits and we should all like to pay less for them. But those are not matters that we can settle by changing the system. Public service pensioners also have the greater opportunities, which this Government have made available to occupational pensioners generally, to make personal pension provision or to pay additional voluntary contributions.

Therefore, the days of large and technically detailed superannuation Acts are, I am pleased to say, long past. However, that does not mean that there will never be a need to legislate. From time to time there will be a need to tidy up the statutory framework and this Bill fulfils that more modest ambition. It will rectify a few anomalies and minor unintended consequences which may have emerged since the early 1970s. It will also make some minor but none the less desirable adjustments to the statutory framework, including some minor consequential amendments occasioned by the wider scope for making additional voluntary contributions introduced following the Social Security Act 1986. It will also extend the powers of the Secretary of State in relation to the determination of employers' contributions in the teachers' and NHS schemes and the payment of injury benefits to teachers.

Hon. Members will have seen the explanatory and financial memorandum and the Bill itself and will, I am sure, appreciate that many of the clauses are complex and technical. I shall give detailed explanations of each clause in Committee, but today I shall concentrate my remarks on the reasons behind the clauses in the Bill and briefly sketch the effect of each clause.

Before I explain the contents of the Bill in more detail, I should make two more general points. First, the Bill does not directly alter the provisions of any pension scheme. The provisions of the schemes concerned are given in the rules made under the Superannuation Act 1972. The second is that, although the amendments to the Pensions (Increase) Act 1971 and the Social Security Pensions Act 1975 will alter the amounts by which some pensions will be increased, the changes do not affect whether a pension is paid. That is a matter governed by the rules of each pension scheme, not by the Pensions (Increase) Act.

Clause 1 is the main clause in the Bill. Public service pensions are increased in line with prices provided certain qualifying conditions are satisfied, and this clause amends those conditions. There are three separate changes. First, the clause provides for the phasing out from 1 January 1993 of a condition under which retired female scheme members with dependent children qualify for pensions increase even if they are below the normal qualifying age of 55. That concession does not apply to male pensioners and the proposed change is needed to comply with EC directive 86/378 which requires member states to introduce equal treatment for men and women into occupational pension schemes. At present, very few women qualify for pensions increase under that condition—we know of only eight in the centrally administered schemes for which data is available. However, if it were applied to men, approximately 7,000 police pensions would have to be increased, and, in addition, if analogous arrangements were introduced in the armed forces pension scheme, it is thought possible that some 50,000 armed forces pensions would have to be increased.

The Government do not consider that it would be appropriate to make a major extension of that kind to the conditions for pensions increase, which would result in the pensions paid to those who retire at comparatively young ages and can enjoy second careers being increased. Equal treatment for both sexes can therefore be secured only by repealing the relevant provision of the Pensions (Increase) Act 1971. The Bill does that, but ensures that the accrued rights relating to service rendered before 1 January 1993 of the very few current and future female pensioners who benefit from this provision are fully protected.

Second, the clause provides for all pensions paid to survivors of scheme members to he increased in line with prices. At present, widows' and children's pensions are increased, but pensions paid to widowers and other adult dependants are increased only if the survivor is over 55 or physically or mentally incapacitated or, if a woman, has a dependent child. Most public service schemes have now aligned their rules on widowers' pensions with their rules on widows' pensions, and it is appropriate, therefore, that widowers' pensions should now be increased under the same conditions that apply to widows' pensions. It is possible also in some public service schemes for pensions to be paid to adult dependants who are not widows or widowers of scheme members if certain conditions are satisfied, or if the scheme member surrenders part of his or her pension. There are very few pensions in these categories and most are already increased because of the pensioner's age or state of health. We think that it is appropriate therefore to simplify the conditions for pensions increase and to introduce equal treatment by providing for all those pensions to be increased.

I emphasise that, in practice, these provisions affect very few women and men receiving, or expecting to receive, public service pensions. No one will lose any accrued rights. There is little extension of existing provisions. In that sense, it represents a practical, cost-effective and reasonable response to the problem of equal treatment and the requirements of the EC directive to which I referred.

Third, two minor extensions have been made to the conditions under which injury benefits paid by pension schemes are increased. In practice, public service pension schemes increase almost all injury benefits, even though the beneficiary may not be regarded as having finally retired on ill-health grounds or as being completely incapacitated. This clause makes sure that such payments of pensions increase in those cases are covered by the Pensions (Increase) Act.

Clauses 2, 3 and 10 make changes to the Acts to rectify some problems that have emerged since the early 1970s. For example, clause 2 amends the Pensions (Increase) Act 1971 to bring the law on two small, technical aspects of pensions increase into line with the practice followed by public service pension schemes since 1965. Clause 3 amends the Pensions (Increase) Act to end a provision that gives rise to extremely small payments to pensioners but with a disproportionate administrative burden for the Department concerned.

Clause 10 amends part of the Superannuation Act 1972 to clarify the protection given to re-employed scheme members if changes that are potentially detrimental to them are made to regulations for local government, teachers and NHS schemes.

Clause 4 enables the Secretary of State to make regulations for teachers' and NHS schemes under which the costs of pensions increase may be recovered from employers through the contributions they already pay towards the cost of basic benefits. If and when the necessary regulations are made, the Government Actuary will advise on the appropriate contribution rates for employers. Employees' contributions will not be affected.

Clause 5 amends a provision in the Social Security Pensions Act 1975 under which some widows have part of their pension indexed by both the public service pensions scheme and by SERPS.

Clauses 7, 8 and 9 make some minor technical amendments connected with the wider scope for making additional voluntary contributions introduced following the Social Security Act 1986. Clause 7 makes sure that money purchase benefits arising from additional voluntary contributions paid by scheme members are not indexed by public service pension schemes. Clause 8 relieves certain schemes of a responsibility to pay annuities purchased by scheme members where the scheme member himself has the chosen the company that will provide the annuity. Clause 9 brings money purchase pension schemes for civil servants within the scope of the existing arrangements for agreeing amendments to Civil Service pension schemes that may adversely affect the accrued rights of scheme members or pensioners.

Clause 11 allows the Secretary of State to make regulations under which injury benefits can be paid to teachers by their employers. At present, these benefits can be paid only by the Secretary of State. It is more appropriate for those benefits to be paid by the employer than the pension scheme. This clause makes that possible, and allows existing arrangements made by some local education authorities to continue until any regulations are made.

The House will see from this brief description of the Bill that it is almost wholly concerned with making minor, largely technical, adjustments to the existing legislative framework governing public service pension schemes. There are no substantial changes to that framework which has stood the test of time well. This short, modest but useful Bill will ensure that the relevant Acts can continue to provide sound framework for public service pension schemes in future years. I commend it to the House.

3.50 pm

The Bill appears to be modest and non-controversial, hut on close examination it is seen to contain clear signposts of the Government's rather wayward policy on pensions. Unfortunately, all the signposts point backwards. Bills such as this are rare, but they give the House a chance to examine the drift of Government policy.

Unfortunately the hon. Member for Eastbourne (Mr. Gow) is no longer in his place. The rather convoluted answer to the hon. Gentleman's question about whether we were acting as a result of a European directive should have been that we are acting as a result of action from Europe. That is because the European Community which was once denounced as a rich man's club is now laying down minimum standards of fairness and justice and, sad to say, Britain is having difficulty keeping up with those. The Bill is very much part of that process.

Public service pensions, and especially Civil Service pensions, have blazed a trail for all other pensioners. With our customary magnanimity I welcome the beneficial parts of the Bill and thank Ministers for the unusual generosity that they displayed and the way that they co-operated during work on the Bill. There were special difficulties because work on it spanned the Christmas recess.

Clause 1 has both negative and positive aspects. The positive proposition is the extension of increases to widowers' pensions. At first sight that looks generous but that is not a trait that we instantly associate with the Government. The matter that is being tackled has been the subject of some controversy in the House. Early-day motion 600 put down on 15 March 1989 was signed by 121 hon. Members including six Conservative Members and asked for just such a reform.

The Assistant Masters and Mistresses Association contacted me today expressing some concern. Although that trade union has a membership of more than 130,000 and has waged a vigorous campaign on the issue, the only information that it had about the change was received today. It was only because of the wonders of the fax machine that I have had documents from the association on this matter. The association says that its formal consultative group, the teachers' superannuation working party, which is maintained by the Government, has not considered the Bill's proposals. The association tells me that as far as it can tell none of the trade unions represented on the working party has been consulted about the Bill or notified about its contents. Perhaps we shall hear more about that later in the debate.

Since April 1988 all contracted-out schemes have been obliged to provide a guaranteed minimum pension for widowers as well as widows. The Civil Service scheme previously provided widows' pensions as an optional extra for women civil servants, and for that an extra 1·5 per cent. contribution was paid. From April 1988 the 1·5 per cent. contribution was made compulsory for men and women. They have been paying for the advantage that has been offered today for some considerable time. The Government have no alternative but to give to widowers the same pension increases that widows receive.

The negative aspect of the Bill has alarming repercussions. It is the abolition of pension increases for retired women under the age of 55 with dependent children. In the Civil Service superannuation scheme the minimum pension age is now 50. The only circumstances in which a woman would retire under the age of 55, other than on medical grounds—where pension increases are payable regardless of age—are redundancy, approved early retirement or retirement on an actuarially reduced pension. Some mothers under the age of 50 with dependent children may draw pensions from other public sector schemes with a lower pensionable age, such as the police scheme, but they are likely to be few in number. The Minister confirmed part of that today.

The numbers involved are low, but if that is so, why bother to deprive people of the pension increases that they now enjoy? The Government's excuse is that the increases discriminate against men. That is one of the signposts in the Bill. More major decisions will have to be made in future to comply with the progressive European directive —and future directives—which says that we cannot discriminate between men and women. An enormous discrepancy which the Government must tackle before long is the age at which men and women can draw a state pension. At present there is discrimination because for women it is 60 and for men it is 65.

It seems that the Government's reaction to the call for an end to discrimination is, not to spread the advantages, but to take advantages away from one sex so that both sexes are discriminated against. In their view, that is a reasonable way to achieve discrimination. However, the Government are discriminating down rather than spreading the advantages.

To extend pension increases to fathers under the age of 55 would achieve equal treatment and would be a reasonable step to take. We suggest that the Government should do that instead of taking the increases away from mothers. The cost would be relatively small because at 55 fathers already qualify for a pension at the higher rate. That would be reached by annual increases.

In principle there is no case for paying unindexed pensions to men or women of any age without children. There is room for argument about the age at which a pension should be payable and under what conditions. However, once it has been decided that someone is entitled to a pension, it makes no sense to allow that pension to be eroded by inflation. Either the person needs the pension or he does not. If he does, he needs to have its real value preserved.

The Bill is part of a long and, in most aspects, honourable history of providing decent pensions for civil servants. The present Civil Service scheme dates back to the Superannuation Act 1859. Richard Titmuss wrote 25 years ago:
"The civil servants were the first large organised group of workers to obtain security in their old age. The foundation of the system firmly settled by the Act of 1859, remains today: the governing principles applied more generously with the passage of time, still rule authoritatively. In 1963, the system was still a model and a goal for the vast majority of British workers."
In 1990 that still remains true. Much progress has been made in pension provision for other occupational groups. The public service as a whole has attained pension rights comparable to the Civil Service. Increasingly, occupational pension schemes in the private sector have been modelled on Civil Service advantages, with pensions based on individual earnings in the final year or the years before retirement. Where they have lagged behind is in inflation-proofing pensions and in shielding rights for people who change jobs. Sadly millions of people are still exposed and vulnerable without the strength of an occupational scheme behind them. They include the 3·5 million people who have been induced by a heavy cocktail of bribery and misleading propaganda to take out the so-called personal pension schemes. They may well rue that decision if they stay in the schemes for longer than five years.

The greatest leap forward to the goal described by Titmuss in 1964 for securing pensions for the majority of workers comparable to those in the Civil Service was taken in 1975 when the then Labour Government's Social Security Pensions Act introduced the state earnings-related pension scheme. The scheme was based on a plan which was first published in 1957, and Titmuss was one of the authors. Its inspiration was firmly rooted in the Civil Service scheme, which had been created a century earlier and had been tried and proved.

The comparison with Europe still prevailed. Most of our European partners now have schemes that are based on the principle that pensions should be related to previous earnings. That is one of the main reasons why our pensions lag so pathetically behind those in the rest of Europe. British pensioners still rely on a flat-rate pension for the bulk of their state pension.

The Social Security Pensions Act 1975 was a pensions revolution. It transformed the retirement prospects of the great majority of the working population. It was a considerable achievement to confer on half the working population—it was previously not covered—new pension rights comparable to final salary occupational schemes. As important but not so widely recognised was the secondary achievement of the 1975 legislation, and that was to confront the cumulative destruction caused by inflation of pension values. Again, the model was the public sector.

The Pensions (Increase) Act 1971 had the effect that public sector pensions were automatically inflation proofed. The 1975 Act protected state earnings-related pensions from the ravages of inflation and the State undertook the inflation-proofing of the guaranteed minimum pension by contracted-out occupational schemes. Thus the pensions of millions in the private sector were brought nearer to the higher standards set by the public sector. The Bill is important for the changes in the pension rights that are directly affected by it, and the reverberations will spread wider to all provisions for retirement. That is why the Opposition are convinced that it is entirely appropriate that a spokesperson on social security should participate in the debate.

Clause 7 excludes money-purchase benefits earned by additional voluntary contributions from the provisions of the Pensions (Increase) Act 1971. A money-purchase pension is the annuity that can be brought from the amount of money that is available at pension age from the approved contributions plus investment income. In theory, on reaching pension age a person can choose to buy an index-linked annuity, but it is unlikely that many people will do so. That is because an unindexed annuity will have a much higher initial value.

Encouraging people to pay into money-purchase schemes, which is favoured strongly by the Government, is likely to result in payments of pensions that are fixed in cash terms with no protection from inflation. That is true of personal pension schemes too, except where there is a requirement to provide annuities rising by 3 per cent. a year. Even that applies only to annuities purchased that meet the minimum contribution that is required for contracting out. It would not be sensible to object to clause 7, but it illustrates a significant problem that will inevitably arise again and again from the proliferation of money-purchase schemes under which the Government are now acting. A complexity has been introduced into pension schemes that will require a great deal more legislation in future.

There has been a remarkable change in the indexation of pensions in the past decade. In the early days of the Thatcher Government it was known that the Prime Minister thought of the Civil Service as a grossly over privileged group, and that the privilege that the right hon. Lady begrudged more than any other was the right of Civil Servants to index-linked, inflation-proofed pensions. The repeal of the Pensions (Increase) Act 1971 was high on her hit list. Then the emphasis changed suddenly from abolishing indexation to asking civil servants to pay for it.

Exactly 10 years ago today, on 8 January, The Guardian published an article by Ian Aitken under the headline,
"Search for way to end pension-inflation linking may be dropped".
The lady was for turning. The story confirmed that the Prime Minister wanted to end index linking and social benefits in general, especially for public services. Ian Aitken wrote:
"Ministers now seem to be agreed that an arbitrary cut off in inflation proofed pensions would have wide effects throughout the public services and in some cases would involve a breach of contract."
Right hon. and hon. Members may recall that in February 1981, Sir Bernard Scott's committee dealt a bitter blow to the Prime Minister's plans when he found that the pensions deductions made from civil servants' wages were nearly twice those made from the earnings of employees in the private sector, so civil servants were enjoying no bargain whatsoever. More importantly, Sir Bernard not only made the point that index-linked pensions were not an indefensible privilege to the public sector—far from it—but that they should be extended to the population as a whole. The committee reported:
"It is highly desirable as a social objective that the standard of living of those in retirement should be protected. This is clearly recognised in countries like France and West Germany, where the benefits enjoyed by pensioners are superior to those of this country and the benefits of index linking extend alike to both public and private sectors. In the United Kingdom, the full cost of protecting pensioners has yet to be recognised and fully shouldered during working life. We believe that there may be helpful lessons to be drawn from our work for the private sector pensions and their financing, as well as for the public sector."
Nothing has changed. The report makes two crucial points on European practice and on index linking that are intimately germane to the Bill. How are we doing nine years later?

It is notoriously difficult fairly to compare pensions in different countries, but the European Commission recently made a brave attempt at doing so. It took as a standard the amount paid to a new pensioner who had worked for an average wage in manufacturing industry. Two different methods of comparison were used. I have urged the Government to adopt them both, but so far they have declined. The first method is to convert the cash amount into ecus by using a standard rate of exchange known as the purchasing power standard, which takes full account of the cost of living in each country. The pension is thus related to the value of purchases that can be made locally.

Not surprisingly, and as was the case nine years ago, the United Kingdom came out badly by comparison. The British pension of £53 is almost half the £104 paid in Luxembourg and barely half the £101 paid in the Netherlands. Britain is only beaten into bottom place by Ireland, with £43. I must be fair and give details also of the Commission's second comparison, which takes the pension as an average of manufacturing industry earnings in each country, after taking account of tax. That system is known as net replacement ratio, and it uses the figure of 100 to represent average manufacturing earnings.

The best countries pay pensions of nearly 90 per cent. of average earnings, while the United Kingdom and Ireland pay less than half of pre-retirement earnings, with a pension of 46 per cent. It seems extraordinary that the neglect of the basic pension in particular should continue.

The index linking of state pensions introduced in the Social Security Pensions Act 1975 was once challenged, but that provision managed to survive. It would not have done so had the proposals in the June 1985 Green Paper, "The Reform of Social Security—Programme for Action" been implemented. It was the Government's clear intention to abolish SERPS, and with it the inflation-proofing mechanism, but their nerve again failed them. The scheme was savagely cut by the Social Security Act 1985, but the inflation-proofing provision remained intact. Contracted-out schemes must now provide inflation proofing of the guaranteed minimum pension up to 3 per cent., instead of the state scheme doing that for them. The state scheme still makes provision above that level.

The Government's newly found enthusiasm for index linking—provided that someone else bears the cost—is about to bear fruit in the next social security Bill, which will require limited indexation of occupational schemes above the guaranteed minimum pension level—but apparently, only when a scheme is about to be wound up.

The first Civil Service pension was granted in 1684 to Martin Horsham, a land waiter in the Port of London, who, in the memorable words of the Treasury Warrant at the time, was paid it because he was:
"so much indisposed by a great melancholy that he is at present unfit for business".
There is little in the Bill or the Government's pension policy that would have lifted Martin Horsham's melancholy and, sadly, there is much that would have deepened it.

This is a mean-spirited, patch and prop Bill. In the past, Britain has led the world to liberate retired people from the anxiety of deep poverty. Europe is now leading Britain, coaxing and coercing the Government out of their obsolete fixations. The Bill continues a Government pension policy that is wasteful, confused and mean.

4.9 pm

I have to declare a financial interest in the Bill as I am a beneficiary of the arrangements that it makes for public service pensions by virtue of service in the colonial administration of Nigeria.

I welcome the Bill. We should all support the details of the Bill, and I was distressed to hear my hon. Friend the Member for Eastbourne (Mr. Gow), whose judgment is usually quite sound, appear to cast some doubt on the merits of the Bill because some of its proposals have apparently been prompted by events within the European Community. If that is so, it is a jolly good thing.

Women's equality is not a subject on which I normally speak at great length, or with enthusiasm, because women may be equal but they are also different. However, there can be no doubt that the small amendments proposed in the Bill are good ones for women and I am surprised that they have not been made before. They are mostly self-evident and logical, because the pound paid by a woman civil servant is as good as the pound paid by a man during their service, and there seems to be no reason for discrimination between the sexes and in that respect the proposals in the Bill are to be commended.

Apart from amending injustices and anomalies and improving pensions for public officers, there is a need for the Bill and for all pension arrangements to be index linked due to inflation—the evil and the scourge of modern times. Inflation distorts economies and causes great misery and cruelty, and it should remain the enemy of all Governments. If we can beat inflation, we shall not need to introduce measures constantly to reappraise the value of pensions to people who have earned what they are paid at the end of their service in a pension because of the contributions that they have made or that have been notionally made for them during their service. The Government should bear in mind that the financial burden of the Bill can be eased by the extent to which they are successful with their anti-inflation policy.

A number of other more detailed matters come to mind when we discuss public service pensions. Many British citizens, resident in Britain, are pensioners of a public service that is, in fact if not in law, under the Government of the United Kingdom. For example, the pension rights of people who served in the colonial service under the Government of the Federation of Rhodesia and Nyasaland were secured on the basis that employers' contributions would be made by the Governments concerned—successor Governments, where transfers have taken place. The value of such pensions was therefore tied to agreements between Governments, which has meant in practice that many former British civil servants serving in our overseas territories must live on a pittance. The value of their pensions has not benefited from inclusion in the general arrangements covered by the Bill, because technically their employer was not the United Kingdom Government but the result of arrangements between the United Kingdom and other countries—or for other similar reasons.

To their credit, the Government have recently eased the problem concerning the Federation of Rhodesia and Nyasaland by making an ex gratia payment into the fund, which has enabled pensions to be increased. That, however, is merely a stopgap measure, welcome though it was at the time, and I hope that it will eventually be replaced by a provision consistent with the spirit of the Bill.

Civil servants in Hong Kong are among those with similar problems. The colonial or overseas Government —not the United Kingdom Government—are bound to a pension obligation unless an arrangement has been made between the two Governments for the money to be transferred to the United Kingdom Treasury. The United Kingdom and Nigerian Governments reached such an arrangement for my pension, but, as the Hong Kong Administration are within the British colonial empire, pension arrangements are still governed by Hong Kong regulations.

The main difficulty is that the value of Hong Kong pensions is established by the prevailing exchange rate, and the Hong Kong dollar is inclined to fluctuate. At present it is notoriously subject to the influence of world events, and to other matters that have nothing to do with the interests of the people involved. Such influences do nothing to assure those people that they will receive an appropriate retirement income, whether or not they have already retired. We want them to stay in Hong Kong, but there is still the problem of their pensions.

Expatriate staff of the Hong Kong Administration who are on pensionable establishment will in due course retire, and their pensions will be determined by the value of the Hong Kong dollar. Surely the United Kingdom Government have a moral obligation to ensure that those people do not suffer because of the instability of future foreign exchange conditions, but are guaranteed the full value of their pensions—uprated by arrangements in the legislation referred to in the Bill—so that they need not fear the suffering experienced by other colonial service pensioners in, for instance, the Federation of Rhodesia and Nyasaland.

Part of our imperial responsibility is still the obligation to protect those who have served the Crown, often in an inclement climate and unhealthy circumstances. The conditions of people who maintained and controlled the government of the empire and our remaining colonies should not be prejudiced by the fact that their service was notionally directed towards a Government separate from the United Kingdom. I appreciate that this precise point is not strictly covered by the Bill, but I am sure that the Minister is well aware of it and that he will ensure that those who are responsible for taking this overview of our obligations to all British public servants abroad will take their cases into account so that this injustice is remedied.

4.20 pm

I endorse everything said by the hon. Member for Orpington (Mr. Stanbrook). The Government ought to examine carefully the provisions that have been made for former colonial servants of Her Majesty's Government. The hon. Gentleman may be right that the long and short titles of the Bill will make it difficult for the Standing Committee to consider amendments covering that point, but I hope that the Government will deal with the plight of former Crown servants. The hon. Gentleman has made a valuable contribution to the debate.

I am worried about the way in which pensions legislation in general is enacted by the House. The explanatory and financial memorandum refers to the Bill rectifying
"certain anomalies and unintended consequences"
in previous legislation. The parliamentary draftsmen are doing no service to public servants who are in receipt of public service pensions by drafting legislation that is technically flawed and which, to lay persons, is completely unintelligible.

I hope that the Government will consolidate some of the pensions legislation. I recognise that a different series of Acts governs public service pensions. They are quite distinct from the Acts that apply to most pensions, but there is an overlap between the Treasury's responsibility for public service pensions and the Department of Social Security's responsibility for other pensions.

Has any consideration been given to the systematic and cohesive consolidation of all the statutes relating to pensions in all their different aspects? It would then be easier to understand the ramifications of the legislation, some of which has been in place since public service pensions were first given in the year 1684, as the hon. Member for Newport, West (Mr. Flynn) has told us.

The hon. Gentleman also made a valuable point when he suggested that the House should examine carefully how the Government are seeking to cope with requests from the European Community, or anyone else, for a pensions system that would eliminate discrimination between males and females. Such a move would be welcomed. It is long overdue.

The Government pick and choose between benefits. Some they are prepared to level up, while others they level down. They are breaking the spirit of European Community directives that place an obligation on member states to end discrimination. By and large, the Government are levelling down all the time. I speak as a humble Scots solicitor. I am not an expert in pensions legislation. It can be argued that what I have described breaches the spirit of the directive and could be challengeable through the European legal system. The Government must make it clear what principles they will adopt when they approach the problems that they will experience with ending discrimination between males and females.

My overall impression, on skimming through the Bill, is that the Treasury has done a quick trawl to see where it can save the odd bob or two. The Minister shakes his head. I am more sceptical than he obviously is. Some of these provisions will save money. With his usual eloquence and competence, the Minister skipped over the fact that it was mooted that the police, fire and armed services should receive additional benefits. The idea was given careful consideration, but the decision went against them. Nevertheless, the sum involved must also be weighed in the balance.

The pensions industry has studied the Bill. I give it a cautious welcome. On balance, it improves things. However, the Government can be accused of looking for quick ways to save the odd buck, and the House should examine that carefully before giving it a Second Reading.

As I have already said, there is confusion about pensions legislation. Clause 2 contains quite a substantial element of retrospection. There may be reasons or cases that justify retrospection in some circumstances, but the Minister did not mention them. Any retrospective legislation, especially if it affects pensions, should not be accepted casually.

I shall put my Scots solicitor's hat back on and draw attention to clause 2(5). It amends the Pensions (Increase) Act 1965, but that Act was repealed by the Pensions (Increase) Act 1971. That is a very good trick if it can be done, but I think that it is an example of technical incompetence. I am sure that it will interest the hon. Member for Orpington, who is a distinguished observer of these matters. No doubt the Treasury has more solicitors than I could muster on this Bench. Indeed, I can muster the support of only my party leader—but that is quite considerable support, although perhaps not on pensions legislation. He is neither a Scot nor a solicitor. I am worried about slipping through legislation that purports to amendment an Act which was repealed yonks ago. We should have a word about that from the Minister.

Clauses 3, 5 and 7 are a bit petty, but clauses 5 and 7 make sensible changes. Although I have accused the Treasury of trying to save money, I must observe that the changes in clauses 5 and 7 are justified because the double benefits that were previously available were overgenerous.

It is all very well for the Minister to say that the Bill is tidying up various pieces of legislation and that it is all minor and technical. Given enough time—preferably not during the Christmas recess which included Hogmanay which is a much more important festival north of the border—and given the opportunity in Standing Committee I could certainly provide a whole list of minor or consequential amendments that will certainly cost the Treasury money. I shall suggest one now.

I am the joint secretary and treasurer of the all-party committee on pensioners, and the most obvious case that has come to my attention concerns the changes to the Civil Service pension in 1978. Civil Service widows' pensions were not made payable to widows of post-retirement marriages until the pensions legislation of 1978. That gives rise to an anomaly because widows of post-retirement marriages after 1978 are now treated much more generously than those who were widowed before then. I cannot believe that the Treasury objects to that on financial grounds because it must cost a relatively tiny sum compared with some of the other savings being made in other parts of the Bill. That is a clear example of another anomaly which could have been tidied up in the Bill. It would have had a substantial effect and removed an important anomaly which has been causing quite legitimate and justified concern among those who observe the comings and goings of the Civil Service pension funds and schemes.

I said earlier that the hon. Member for Orpington had made a valuable contribution concerning colonial pensions. Again through the all-party committee on pensioners I have received representations from a host of different organisations. On the last day of last year I received one from the consultative committee of the Kenya local authorities superannuation fund again complaining about matters such as those raised by the hon. Member for Orpington. Technically, they may not be capable of rectification under the short title of the Bill, but given a bit of good will from the Government and a slightly longer short title, the Bill could have addressed some of those problems. They would have required some subvention from central Government funds into certain outstanding funds which are leaving former colonial servants in dire financial circumstances. It is a missed opportunity. Small items such as that make it impossible for the Minister to say that the Bill is simply a minor and technical matter.

The Bill embraces some important issues, and the Minister will have to convince the House of some of the financial aspects and consequences of the provisions of the Bill before I shall be entirely comfortable with it. However, I shall certainly recommend to my colleagues that on balance the Bill deserves a Second Reading.

4.33 pm

I wish to take part in this short debate mainly to voice my concern that sometimes the House passes legislation such as this late in the evening or, as on this occasion, soon after the holidays without hon. Members understanding the full significance of the Government's intention in future years to use the legislation as a principle. I wish to discuss the principle of discrimination. I seek assurances about the Government's intentions, whether in future it will be used for levelling down rather than levelling up and whether they attach importance to the Bill in respect of pension matters before the European Commission.

My hon. Friend the Member for Newport, West (Mr. Flynn) said that by clause 1(2)(b) the Government seek to amend a provision that currently discriminates against men who retire before the age of 55 on grounds other than ill health but who cannot take advantage of the specific arrangements by which women with dependants can retire before the age of 55 on grounds other than ill health. The Government aim to end discrimination against male contributors to the fund, but in so doing women's rights will be removed.

In reply to my hon. Friend the Member for Newport, West, the Minister attempted to use the numbers game in respect of the number of women who currently benefit, and said that the figure is derisory. He gave a more important answer in relation to the number of men who could qualify if the Government ended discrimination more positively by allowing equal pension entitlement for men and women.

The Minister may argue that in calculating for the fire and police services and other employees tens of thousands of men may benefit, but that raises an issue of principle in relation to pension entitlement. Far too often when the Government have been faced with an issue of discrimination from the European Community they have chosen to remove the rights of one group to end discrimination against another.

I signed early-day motion 88, which argued for the ending of discrimination against men who reach retirement age at 65, whereas women benefit at 60. Those who have been involved in ending that discrimination foresee under this legislation the possibility of the Government establishing the principle of levelling down by removing the rights of women rather than legislating for a universal pension age for men and women. That is a controversial matter within the European Community, and at some stage the House will return to it. The debate is continuing not only here but outside, and the Government are receiving advice from pension actuaries and others about amendments that the European Community may force on them at a later stage. Although the amendments might affect few women, they could have significant repercussions on the debate on pension entitlement in future years.

As I understand it, those in the pensions business who currently advise the Government say that a reduction in the male pension age to 60 would be expensive and would lead to a significant reduction in the net contribution. Therefore, rather than reduce the pension age for men, over stages the Government will increase it for women to 65. The basic pension and the state earnings-related pension scheme will be available to women aged between 60 and 65, and those retiring at 60 will receive the equivalent of two thirds of the full state pension. Women will lose their current pension entitlement at 60. Labour Members believe that to legislate for the worst elements of a scheme but to remove its best elements is no way to end discrimination between men and women.

The principle embodied in clause 1(2)(b) will put pressure on the Government to introduce a phased arrangement under which women's entitlement to full pension at 60 will be obliterated. Women who are currently aged about 50 will retain their entitlement to full pension at 60, but those aged between 40 and 50 will see their entitlement to a full pension changed to between 61 and 64. Women under 40 years of age will have to wait until they are 65 before getting a full state pension. That means of ending so-called discrimination is unacceptable.

Legislation covering care in the community is going through the House. More than 90 per cent. of those who care in the community are women who, voluntarily or involuntarily, give up their employment at an early age to look after an aged or severely disabled relative. It is ironic —indeed, I can find no precedent—that the House is considering legislation that will make it easier for people to care for others but a clause in this Bill will prevent women from retiring before they are 55 to look after a dependent relative and they will lose the benefits that they are currently enjoying.

The House would not expect this or any other Government to allow such discrimination. Over the coming decades, a growing number of women will be asked to take on the job of caring in the community. They will apply to their employers to retire before they reach 55, not on medical grounds involving themselves but on medical grounds relating to a dependent husband, mother or father or child. Changes in medical techniques mean that children are living beyond their teenage years with severe physical and mental disabilities.

The Minister may believe that this is a small, insignificant group of women. Legislation must take account not only of what is happening now but of what will happen in 10, 20 or 30 years. One of the damning features of clause 1 is that it fails to recognise changing trends and the needs of people who will be required to care for their elderly and dependent relatives.

I have spoken in the House on behalf of fire authorities, as their honorary parliamentary adviser. Because of the nature of fire fighters' work, a significant number would benefit from an early retirement age, but restrictions imposed under current legislation mean that they cannot. They would have liked an amendment to allow them the same rights as women who retire below the age of 55. Not only are these fire fighters not included in the Bill but—we never expected this—women who are now covered by legislation will be excluded.

Although there will not be a Division on the Bill, the House must return to the long-term fundamental issues of equal opportunities and pensions. The Opposition and a significant number of Conservative Members will not accept legislation that operates on the spurious ground that removing the rights of one group of pensioners whether male or female, is equalised by the ending of discrimination against another group. That is no way to proceed with legislation. I shall not seek to divide the House—I see that you are smiling, Mr. Deputy Speaker, and thinking, "Thank God for that"—but I am not satisfied with the legislation.

4.44 pm

By leave of the House, Mr. Deputy Speaker, I should like to speak again. I am grateful to hon. Members for the attention and interest that they have shown in this largely detailed and technical Bill, but I should like to stress again that it is a modest Bill and has modest scope. It amends the statutory framework in which the regulations for public service pension schemes are made. Apart from some adjustments at the margin to the law prescribing the index linking of public service pensions, the Bill does not directly alter the rules of any pension scheme. Changes to these rules will continue to be made in the usual ways, which are prescribed in the Superannuation Act 1972.

There can be no fear that the Bill will seriously affect the pensions of those who have retired after many years of public service. I assure the House that there is no cause for such concern. The proposed changes to the qualifying conditions for pension increases—clause 1—will be introduced in a way that fully protects the accrued rights of serving public servants and those already retired. The double indexation of part of the pensions paid to surviving spouses will be phased out gradually and only the widows and widowers of scheme members not yet retired will lose this anomalous and unintended benefit. That is covered by clause 5. The ending of the extremely small payments of pensions increase on additional lump sums will be introduced for future retirements only, and this is covered by clause 3.

I assure the hon. Member for Newport, West (Mr. Flynn) that we are not alone in work of this kind. Other European countries are affected by the 1986 directive. I know that that will be of interest to my hon. Friend the Member for Eastbourne (Mr. Gow). The hon. Member for Newport, West asked whether there had been consultation with various interest groups. I believe that all interest groups support the measures in the Bill, but if any have suggestions to improve it, let us have a look at them.

I understand that the Department of Education and Science is holding discussions with teachers' representatives all the time and that a joint working party on pensions is operating now. The hon. Members for Newport, West and for Makerfield (Mr. McCartney) asked why we did not "level-up" pension increases for retired male scheme members so that those under 55 with dependent children could receive pensions increase. As the hon. Gentlemen know, this would be a costly improvement to superannuation benefits for which either employers or employees would have to pay. During my opening speech I set out details of how many people would be affected one way or the other. If we went down the road advocated by the hon. Members for Newport, West and for Makerfield, an estimated 7,000 retired policemen and fire fighters would be affected and it has been said that, on a conservative estimate, about 50,000 retired service personnel would benefit if payments were also made in armed forces schemes. The ultimate cost would be more than £100 million a year—for the police about £14 million and for the armed forces about £100 million.

Surely, in considering whether to amend the legislation, the principle should be whether the current position of women is right. We should ask whether this is a proper aspect to include in pension provisions. The Opposition say yes, in principle. We should therefore consider how it can be applied to all members of the scheme. The Minister has implied that if amendments caused a huge influx in the number of people included in the scheme, the Government might have difficulty in finding the resources needed. The Government should turn to the second, more feasible option and introduce a sheme of phasing in arrangements rather than phasing out the current arrangements for women.

I explained earlier why we have drafted the Bill along these lines. The hon. Gentleman will know that, for the reasons that I gave then, we believe that this is the right course. As I said, we understand that very few people will be affected. We know of only eight teachers who will be affected by the provision, although there may be more.

I referred to the initial cost of taking the course that the hon. Gentleman advocates, which is to level up. I gave that cost as over £1 million a year, and I shall be happy to supply him with the details of that figure if he wishes.

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) knows that any proposal to phase in pensions increase for male pensioners under 55 with dependent children would be equally vulnerable to a challenge that it did not meet the requirements of EC directive 86/378, to which I referred in my opening remarks.

The hon. Member for Newport, West answered his own question about clause 7. An additional voluntary contribution can buy an index-linked annuity if the individual so chooses. The Government support the personal pension developments but also wish to continue good occupational pension schemes, as the hon. Gentleman knows.

My hon. Friend the Member for Orpington (Mr. Stanbrook) has for several years campaigned assiduously for the concession of an additional pension for war service of former colonial expatriate civil servants. I have followed his campaign with interest for longer than the six months for which I have held my present position.

The benefits and qualifying conditions of the colonial scheme have been modelled on those of the United Kingdom public service schemes—in particular, the provisions applying to home civil servants. There can be no special relaxation of the rules for colonial Civil Service pensioners.

My hon. Friend the Member for Orpington also drew the attention of the House to arrangements in Hong Kong. Ministers have said, as he may know, that we do not rule out the possibility of public officers' agreements in due course, although it is not clear whether, in the unique circumstances of Hong Kong, there may be other ways of achieving these ends. It may help if I explain that as other former colonies went into independence, the question of sterling safeguards was settled much closer to the time of constitutional change. This question is one of the matters that the Government are keeping under careful review in consultation with the Hong Kong Government. On present evidence, we are not persuaded that the current arrangements work to the disadvantage of Hong Kong pensioners.

Ministers have stated that the Government fully recognise the particular concern of HMOCS officers in Hong Kong and will continue to keep their interests in mind in the years leading up to 1997. Particular considerations apply in respect of Hong Kong—for example, guarantees under the joint declaration that expatriates may continue to serve after 1997. No firm decisions have yet been made on special measures, such as compensation, that might be appropriate in Hong Kong's unique circumstances.

The hon. Member for Roxburgh and Berwickshire asked about consolidation. I agree that simplicity and comprehensibility are important in any pension schemes and underlying legislation. There are already some important consolidation measures on the statute book—for example, the Superannuation Act 1972 of which he may have even closer knowledge than I. We need to be careful that attempts to produce statutes of near-universal coverage do not make the position more complicated. I am not convinced that the time of the House would be well spent on further pensions consolidation at present. As I have said, the Bill represents a relatively simple and straightforward correction of a few minor anomalies in existing legislation.

With his customary acuteness, the hon. Member for Roxburgh and Berwickshire highlighted clause 2. He is quite right that the clause is retrospective. It aligns the law with the practice of schemes. It brings the law into line with what it was thought and intended to be. I stress, emphasise and underline that no pensioner will lose out as a result of clause 2.

The hon. Member for Roxburgh and Berwickshire wondered whether the position of police and fire personnel had been looked into. The answer is yes, and no anomalies in the way in which legislation affected them were identified.

If I have not covered any detailed points, I shall be happy to write to hon. Members or to talk to them before the Bill progresses further.

Some Government Departments are considering setting up agencies to deal with their work. Will any changes have to be made in the legislation in respect of civil servants who, from this year, may be working for agencies, which although attached to the Civil Service are technically outside it?

Not as far as I know. All public servants are treated the same under the Bill, whoever they work for and whatever the circumstances in which they work. I shall certainly let the hon. Gentleman know if I am wrong in that judgment.

As I explained in opening, the Bill is evolutionary rather than revolutionary. It is intended not to replace a system that has worked well for nearly 20 years but to adapt and improve it to meet the needs of the 1990s in a way that is fair to pensioners and current employees. Against that background, I commend the Bill to the House. I thank those hon. Members who have taken part in the debate— especially my hon. Friend the Member for Orpington, who has given the Bill his support, the hon. Member for Roxburgh and Berwickshire, who spoke on behalf of the Liberal party, and the hon. Member for Makerfield. If any points need to be clarified, I shall be happy to clarify them during the next few days.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.— [Mr. Lightbown.]

Committee tomorrow.

Pensions (Miscellaneous Provisions) Bill Money

Queen's Recommendation having been signified


That, for the purposes of any Act resulting from the Pensions (Miscellaneous Provisions) Bill ("the Act") it is expedient to authorise the following—

  • (1) the payment out of money provided by Parliament of—
  • (a) any increase in the cost of providing increases under or by virtue of the Pensions (Increase) Act 1971 in official pensions and in other pensions within the meaning of that Act;
  • (b) any increase in the cost of providing pensions, allowances and gratuities payable under section 1, 7, 9 or 10 of the Superannuation Act 1972;
  • (c) any increase in the sums payable under any other enactment which is attributable to increased expenditure by any authority in consequence of—
  • (i) any such increase as is mentioned in paragraph (a) or (b) above;
  • (ii) any provisions of the Act requiring the payment of contributions towards the cost of providing increases under Part I of the Pensions (Increase) Act 1971 in official pensions payable under section 9 or 10 of the Superannuation Act 1972; or
  • (iii) the provision of benefits for teachers in connection with injuries sustained, or diseases contracted, in the course of their employment;
  • (d) any administrative expenses of a Minister of the Crown attributable to the Act;
  • (2) the payment into the Consolidated Fund of any sums received by a Minister of the Crown by virtue of the Act;
  • and in this Resolution—

    "official pension" has the same meaning as it has in the Pensions (Increase) Act 1971; and
    "teacher" has the same meaning as it has in section 9 of the Superannuation Act 1972.—[Mr. Lightbown.]

    Government Trading Bill

    Order for Second Reading read.

    4.58 pm

    I beg to move, That the Bill be now read a Second time.

    The main purpose of the Bill is to extend the enabling powers under the Government Trading Funds Act 1973 to establish trading funds. The new powers will be a major contribution to Civil Service management changes, and thus to the benefits that the Government expect from the Next Steps initiative—the creation of agencies—and the fundamental reform of the Civil Service management and financial management.

    To illustrate the links between the Bill and the wider processes of management improvement, we have published the White Paper, "The Financing and Accountability of Next Steps Agencies". The House, through the Select Committees that have so far taken most interest in Next Steps—the Public Accounts Committee and the Treasury and Civil Service Select Committee—has generally supported the Next Steps initiative, and I hope that the Bill will commend itself to hon. Members on both sides of the House. The Bill and White Paper are designed to strengthen the performance of Government Departments by encouraging civil servants to take a more businesslike approach to the efficiency and quality of the delivery of Government services.

    The White Paper sets out the background to the Bill. As it says, although the powers to set up trading funds are not limited to Next Steps agencies, it is expected that future trading funds will be entirely, or almost entirely, drawn from agencies. Thus the Bill takes forward the objectives underlying the Government's whole strategy for public service reform—greater freedom for managers, coupled with greater accountability for delivering agreed objectives. It will allow more organisations to operate as trading funds, which will give them greater financial freedom and greater disciplines akin to those of private sector organisations.

    It may be helpful if I explain how trading fund status will help to promote those objectives. As paragraph 4.2 of the White Paper stated:
    "A 'trading fund' provides a financing framework which covers operating costs and receipts, capital expenditure, borrowing and net cash flow. It has powers to borrow to meet capital expenditure and working capital requirements, and to establish reserves out of surpluses. Within this framework, it can meet outgoings without detailed cash flows passing through Vote accounting arrangements."
    At present only some 20 per cent. of the running costs of Government Departments are offset by related receipts. It follows that the majority of Government activities will not be suitable to become trading funds. That does not mean that agencies dealing with those activities are second-class citizens. Indeed, much of the White Paper is devoted to improving arrangements for them. It is important that all agencies that could benefit from the more commercial discipline of a trading fund should be able to do so. As my right hon. Friend the Chancellor informed the House on 1 February 1989, when he was Chief Secretary, the main purpose of the Bill is to widen the enabling powers under the Government Trading Funds Act 1973 to cover bodies that are directed by statute to provide a service and where the fees are fixed by regulation. As bodies such as the vehicle inspectorate and Companies house do not fall within existing powers, the main purpose of the Bill is to extend the 1973 Act enabling powers to such cases.

    Trading fund status will make possible a much more businesslike approach to the delivery of Government services. However, it has one characteristic that will rightly cause the House carefully to consider an extension of the Government's powers to use that particular financial mechanism. It is that the detailed cash flows of trading funds are outside the full processes of the supply system through which Parliament authorises and controls expenditure. In recognition of that, the 1973 Act rightly requires that no trading fund can be set up without Parliament debating each proposal on an affirmative resolution order. That principle is extremely important, and it is maintained in the Bill.

    The other characteristic of the original legislation, which is strengthened in the Bill, is the statutory requirement for accounting to Parliament. That is much stronger for trading funds than for the remainder of the Civil Service, and the accountability operates direct from the trading fund to Parliament.

    The Government Trading Funds Act 1973 arose from an early precursor of the Government's management reforms. That was the concept of units of accountable management proposed in the 1968 report of the Fulton committee on the Civil Service and the 1970 Conservative Administration's White Paper "The Reorganisation of Central Government". Although the concept is similar to that underlying changes implemented by the Government, it never really took off in the 1970s. The 1973 Act and the three trading funds still established under it—Her Majesty's Stationery Office, the Royal Mint and the Crown Suppliers—are almost the sole surviving relics.

    How do these proposals fit in with those for the PSA and Crown Suppliers Bill that we shall begin discussing in Committee tomorrow?

    The proposals for the Crown Suppliers and its possible privatisation are entirely matters for the Committee considering the Bill. If that Bill is enacted and the Crown Suppliers are ultimately privatised, it would cease to be a trading fund. The Crown Suppliers was one of the products of the original legislation, but it is being dealt with separately by the Bill to which the hon. Gentleman referred.

    During the 1980s the Government have pursued a series of initiatives designed to secure better value for money. Government Departments have had a continuing programme of efficiency scrutinies run under the supervision of the Prime Minister's efficiency unit. The central unit on purchasing has encouraged development of better methods and greater professional skills. In the Health Service, cost improvement programmes have encouraged health authorities to identify and implement ways of providing services to patients more cost-effectively. The result of those measures alone has been total savings to date of some £3 billion. Such savings have helped to finance steady increases in priority areas of spending as well as reducing costs to the taxpayer.

    Improved management can deliver better services at less cost. There is no conflict between greater efficiency and improving the quality of the service. As my right hon. Friend the Chancellor said when he was Chief Secretary:
    "Shoddy public services should not be an option. Nor should they be tolerated."
    A key element in the Government's value-for-money strategy has been the delegation of budgets and financial control to units of management and, wherever possible, to individuals. For the Civil Service, the starting point was the financial management initiative. It had one major purpose—to place responsibility for decisions on both spending and costs at the level where operations and activities are managed and delivered. The units concerned, and the people in them, were then to be accountable for the results.

    The statement of principle might be simple, but implementation is more complex and difficult. It has required a major change in attitudes throughout the Civil Service, which has responded enthusiastically to the new opportunities and challenges. It has also required a great deal of hard work in redesigning systems and procedures.

    Government Departments are large, varied and complex businesses combining policy and executive functions. Those factors have sometimes made it difficult to delegate down the line, to managers at working level, the clear authority to enable them to make the changes that would deliver improved value for money.

    Those issues were addressed in the efficiency unit report entitled "Improving Management in Government: the Next Steps". The key recommendation, accepted by the Prime Minister in her statement to the House on 18 February 1988, was that
    "to the greatest extent practicable the executive functions of Government, as distinct from policy advice, should be carried out by units clearly designated within Departments, referred to in the report as 'agencies'. Responsibility for the day-to-day operations of each agency should be delegated to a chief executive. He would be responsible for management within a framework of policy objectives and resources set by the responsible Minister, in consultation with the Treasury." —[Official Report, 18 February 1988; Vol. 127, c. 1149.]
    The Next Steps initiative builds on the financial management initiative. It is a major step in delegating responsibility to Civil Service managers within clear parameters. It is designed to deliver services more efficiently and effectively, within available resources, for the benefit of taxpayers, customers and staff. It provides a clear framework for delegation and accountability. That makes possible increased delegation to an agency, and through the agency right down to those directly responsible for service delivery, coupled with accountability for the results achieved. The agencies already set up and the announced candidates are listed in annex A to the White Paper. Taken together, they cover about one-third of the Civil Service. My right hon. Friend the Minister of State, Privy Council Office, will reply to the debate and will deal with any issues that hon. Members may wish to raise on Next Steps agencies, possible candidates and the future for them.

    When an agency is set up, it is necessary to look in detail at the financial controls and accountability arrangements within which it will operate. The wide variety of Government functions means that that inevitably has to be done on a case-by-case basis. But the early experience with Next Steps has enabled us to formulate the key general principles that are set out in the White Paper. The Government Trading Bill deals with the aspects of that policy which require primary legislation to implement, and it may assist the House if I outline briefly the coverage of the Bill.

    Clause 1 repeals sections 1 and 2 of the Government Trading Funds Act 1973 and inserts five new sections in it. Section 1 deals with the new powers, which are the central change introduced by the Bill. They would, if Parliament approves the necessary affirmative resolution in each case, allow a trading fund to be established where its revenue consists principally of receipts in respect of goods or services provided, and where it would lead to improved management efficiency and effectiveness. The White Paper—in paragraphs 4.15 to 4.19—explain how in policy terms the Government propose that those new powers would be used.

    Use of the powers would be considered on a case-by-case basis. It is therefore not possible to set out in advance a clear list of candidates. However, among existing agencies, early candidates for consideration as trading funds are expected to include the vehicle inspectorate, Companies house, the historic royal palaces and Warren Springs laboratory.

    Section 2 deals with how the originating debt of a trading fund is determined. In particular, it allows for the possibility of varying the originating debt to take account of subsequent changes in assets and liabilities of a fund. Section 2A deals with the issue of public dividend capital to a trading fund. Annex B to the White Paper explains the circumstances in which that might be used. Section 2B deals with borrowing by funds, and in particular allows funds to borrow from Votes as an alternative to borrowing from the national loans fund. It is envisaged that the majority of borrowing by trading funds in the future will be from Votes.

    Section 4A deals with winding up funds. There have been suggestions in some press reports that increased use of trading funds is designed to prepare more activities for privatisation. There is a grain of truth in this, but only a very small grain in that trading funds are a suitable regime only for the more commercially-oriented Government activities, and it is commercially-oriented activities that are likely to be most suitable for privatisation. But as the White Paper makes clear, the policy remains that described by my right hon. Friend the Prime Minister on 24 October 1988:
    "'Next Steps' is primarily about those operations which are to remain within Government. I cannot rule out, however, that after a period of years agencies, like other Government activities, may be suitable for privatisation".—[Official Report, 24 October 1988; Vol. 139, c. 14.]
    I should therefore make clear that section 4A is intended to deal only with cases where activities cease altogether, where funds are merged, or where they are better financed by other means within the public sector, and not with privatisation.

    What does the Minister mean by this see-sawing? How does that proposal fit in with the proposals for the Property Services Agency?

    The Bill does not cover the Property Services Agency privatisation and the PSA is not listed in the annex. The PSA is the subject of separate legislation and my comments do not apply to it; they apply to the bodies covered in the annex.

    That is an important point. Will the PSA not be run as a Government trading fund before it is privatised?

    It will not. The PSA and the Crown Suppliers are subject to separate legislation and a separate policy which will be considered in Standing Committee.

    Clause 2 deals mainly with minor and consequential amendments, but it and clause 3 also deal with important improvements in reporting and accounting arrangements.

    Clause 4 deals with a separate matter which has been encompassed conveniently within the Bill. Clause 4 takes advantage of the opportunity to remove from the statute book a 1946 power over private sector corporate borrowing which is largely a dead letter already, and will be wholly a dead letter from next April. Clause 5 deals with the short title, savings, repeals and extent.

    I want to conclude by drawing the attention of the House to the important provisions relating to reports and accounts. A major objective of the Next Steps initiative is to reinforce accountability to Ministers and to Parliament by clarifying managerial responsibilities. That applies to all agencies, whether or not they become trading funds. The enhanced role and accountability of agency chief executives and the introduction of framework documents are essential parts of this.

    For trading funds, the 1973 Act provided for each fund to produce annual commercial-style accounts which are audited by the Comptroller and Auditor General and laid before Parliament. The Government consider that the opportunity should now be taken to strengthen those reporting and accounting arrangements. The Bill therefore proposes bringing the Treasury's powers of direction over accounts into line with those in more recent legislation and it contains a new requirement for the production and publication of annual reports. Such reports will include, in particular, a review of performance against financial, efficiency and quality of service targets. Parliament will thus have available to it consistent annual reports and accounts for each trading fund.

    For agencies that are not trading funds, the Bill would extend section 5 of the Exchequer and Audit Departments Act 1921 in a way that would give the Treasury powers to require the production of commercial-style accounts for any agency. Those would be audited by the Comptroller and Auditor General and laid before Parliament. As the White Paper explains, the aim would be to use these powers so that agencies which were not trading funds would supplement the appropriation accounts by commercial-style accounts prepared on an accruals basis and including balance sheets.

    The proposals will increase the information available to Parliament and to the general public. The way agencies are run and managed will become more open, and their performance against the targets that they have been set will be made clear. This is an important step in increasing accountability to Parliament and more widely, and one which I believe will be welcomed by this House. The Bill may appear to be narrow and technical, but I hope that I have made it clear that it has major implications for the working of Government Departments and for the public sector. As such, I commend it to the House.

    5.18 pm

    The Chief Secretary to the Treasury said that the Bill may appear to be narrow and technical, but it nevertheless has important consequences for the way in which the Civil Service is run. I agree with him. In some respects, the Bill has come before the House as a result of a deficiency in the Government Trading Funds Act 1973 and because it is not as easy to set up Government trading funds as the Government would like.

    The Chief Secretary outlined his view of the proposals. His interpretation of the Bill may be correct. However, another view may follow from the fact that the Government are obsessed with their dogma of privatisation. If the Tories win another election, perhaps many Government agencies will be liable for privatisation in subsequent Parliaments. [Interruption.] As my hon. Friends say, there is not much chance of that. But anything, however unlikely, is possible. It is true that, no matter how unprofitable it may be for the country, if something can be sold or even given away with an added backhander if necessary—for example, a green dowry which may cost about £1 billion, or a sweetener if Rover or British Aerospace is involved—the Government believe that the sooner the plans are laid to do so the better.

    The second view is that the Bill is a step along the road to breaking up the Civil Service and preparing large sections of it for eventual privatisation. There is also a third view. It follows from the premise not that the Government are obsessed by their privatisation dogma but that they are obsessed by their cost-cutting and so-called efficiency dogma.

    The Chief Secretary says, "Shocking." Nobody is in favour of spending more money than necessary, but there is a trade-off between spending money and delivering a service to the public. [Interruption.] Before Conservative Members laugh too readily, they should remember that anybody who has wanted a passport in the past year or two will not understand what they are laughing at. People returning from the continent must wait for an hour at Dover because there are not enough Customs officials. They will not understand why Conservative Members are laughing about this important matter. It is not about spending as little money as possible. It is about spending the right amount and giving the right service to the public.

    Does the hon. Gentleman agree that one good way of ensuring that we spend the right amount of money on a service is to create just the sort of trading fund that the Bill would allow?

    I will come to that point because it is the whole object of the Bill. Certain things will be acceptable in certain circumstances if a fund is run correctly and if there are clear guidelines on how a chief executive should run it. Such an agency could deliver a service and be subject to greater scrutiny by the House. I am not prepared to believe that the Government will do anything along those lines. The Government's intention is to try to save as much money as possible.

    The third view is that even this Government cannot privatise large sections of the Civil Service and that their ultimate intention is to commercialise services that are presently provided by the Civil Service.

    Agricultural Development Advisory Service officers charge farmers, even though it may discourage some farmers from using that service and could also be to the detriment of the farming industry and the public. A system of low charges may ensure that farmers do not capriciously or unnecessarily seek advice, but if a trading fund is formed, such services must be operated taking one year with another without making a loss. Charges could become very high and farmers would not use services as much as they should. Without any shadow of doubt, that would be detrimental not only to the farming industry but to the public as a whole.

    The third view is that charges will be increased by the Government from time to time so that people will eventually pay the total cost of services provided and a commercial operation will result. We have heard that Government trading funds will set certain Civil Service activities on a more commercial basis. Of course we could set activities on a more commercial basis, but would the service to the public become better or worse? Several documents have been published over the past three or four years, but that point has not been addressed by the Government.

    The Opposition are hostile to the Bill in so far as it seeks to achieve any of the aims expressed in the second or third views to which I have referred. We are profoundly suspicious about the first view which the Chief Secretary pressed upon us. There will be some advantages in some situations, and I will comment on them later.

    Let us assume that the first view is correct and the Government have no intentions in respect of overtly commercial activities by agencies operating trading funds. It is all very well considering matters case by case, but we have no clear idea of how much of the Civil Service the Government want to turn into agencies, although figures such as three quarters have been given in evidence to various committees in the past. Equally, we have not heard how many trading funds will be instituted. The passport office is one candidate [HON. MEMBERS: "Hear, hear."] Again many Conservative Members shout, "Hear, hear." There is a fee for passports. At present, there is an unacceptably long delay for new or renewed passports. Of course that delay does not apply to Members of Parliament, because the Home Office manages to provide us with a 24-hour service. Hon. Members have nothing to complain about, but the public have a lot to complain about. Except in cases of extreme urgency, people must wait weeks on end.

    Let us suppose that the passport office is to be run as a trading fund. What will be the cost of a passport? At the moment, primary legislation would be required to change the cost of a passport. I hope that the Government will correct me if I am wrong, but I understand that primary legislation would be required to change one of the crucial ingredients of the operation of a trading fund in the Home Office. Who will decide the level of charges? A certain sum was decided many years ago, and no doubt inflation has taken its toll and somebody in the Treasury advises the Home Office from time to time on what it should be in future.

    If a trading fund is instituted, the passport offices would have to look after themselves and take one year with another and not make a loss. The cost of a passport could be prohibitive. If the cost of passports is not to be prohibitive, members of the public will have to wait an unconscionably long time. Most members of the public would say that a week's delay would be reasonable in the case of a new passport and they would not see any reason why a renewed passport could not be delivered by return post or perhaps one extra day at most. Because the work is seasonal, an accountant managing the trading fund would advise a month or six months waiting time in spring or summer and would say that the backlog could be made up in the winter. That is largely what happens at present and if there were a trading fund, where would there be an incentive to do anything different? It would be a choice between providing a service for the public or being able to operate the trading fund so as to have a black figure on the bottom line.

    Perhaps the cost of issuing a passport could be deemed to be too high and it might be decided to pass the total cost to the public. If that happened, the Government would have to provide funds out of general taxation to avoid a permanent backlog. The ultimate horror would be a two-tier system. Those who wanted a passport quickly and by return of post would have to pay double or treble for the privilege. Of course such things are not unknown under the Government because those who have the money are able to take advantage of such services while the rest of us have to wait.

    My hon. Friend is speaking about a trading fund. The Minister answered my hon. Friend's query by saying that the PSA was not relevant. Paragraph 8 of the Property Services Agency's report on the management of the civil estate says:

    "The Property Services Agency are considering the introduction of commercial accounts and a trading fund to give clear information to clients and Parliament. Improvements in their information systems are necessary, however, and although significant interim improvements are being made their strategy is unlikely to be implemented before the 1990s."
    That shows that my hon. Friend's question is highly pertinent to the debate.

    I agree with my hon. Friend. It is a pertinent and important question, and I am glad that the Chief Secretary said that there is no intention of running the PSA with a trading fund, before it is privatised. There has been some confusion about that, but now we have a clear answer which helps many people and not just hon. Members.

    I was speaking about the passport offices and how they would be run with a trading fund. The Government do not approve of public expenditure and because of that I suspect that a long waiting list would be permanent and inevitable. The central issues are whether the service should be self-financing and what are the trade-offs between the cost of the service and its proper performance. There is no point in supplying new passports within a week if proper checks are not made about the applicants.

    There is no point in making a service self-financing if it is deemed beneficial for it to be used but it is too expensive for the average man or woman. Women have the right to a free smear test for cervical cancer. I hope that no hon. Member can think of any circumstances in which there should be a charge for such a test because it is patently and clearly in the interests of the country as a whole that that service should be free.

    As I have said, I could be convinced that some of the pitfalls and difficulties could be avoided and that the passport offices could begin to provide a proper service and have a trading fund at the same time. However—and this is crucial—it is not the trading fund that is vital but having properly paid and properly motivated civil servants. If there are enough of them and they have a high regard for their work and are efficient, thorough, precise and accurate, people will have a good service. That has little to do with a commercial trading fund about which the Government are seeking to persuade us.

    We have to decide whether a proposed charge for a passport is fair and reasonable and whether it is possible and sensible to operate a trading fund on a quasi-commercial basis and provide a first-class service to the public. It would be wrong to set up a fund, commercialise the passport offices, and charge the necessary amount. Passport offices make inquiries about applicants for passports. If they use the police, will the police charge for their activities? Perhaps the police already do that. I will give way to any hon. Member who knows about that. In some cases there would be an incentive for such checks to be minimal and that would be detrimental to the proper functioning of the Civil Service and thus to the country.

    My hon. Friend speaks about the police. In one aspect of police work a new system is being brought in. For the first time in police history there is a system of paying for certain forensic science services. That is a new issue of principle. I am very interested in the forensic laboratories and to me the matter is serious.

    My hon. Friend is right. That matter was next in my notes. The Government are interested in charges and cost cutting and eventual privatisation. Forensic science laboratories now have to receive money from the police when the police send them work to do. As a result, less work will be sent to them by the police. The police will be overstretched and will hesitate to send work to the laboratories. Perhaps eventually the forensic laboratories will have trading funds. Crime that should be solved will be unsolved. There should be no question of an accountant looking at unsolved crime and saying that at least thousands of pounds have been saved; I suspect that if we go too far towards trading funds and agencies we will end up in precisely that situation. When that happens it will provide work for many accountants. If the Government were to remain in office for a long time I would advise youngsters at school to train to be accountants. However, that is hypothetical because the Government will not be in power much longer. Much Government legislation is for the welfare of accountants and not for the good of the country or its expeditious and efficient governance.

    I shall not dwell on my next two examples in the way I have dwelt on the passport example. Revenue received by Customs and Excise is well in excess of the cost of providing the service because the revenue comes from such things as value added tax and stamp duty. Let us consider ports of entry to the United Kingdom. Can one imagine Customs officers becoming really zealous in their tasks if items seized could be sold to contribute directly to the trading fund? That is certainly not beyond the bounds of possibility. Customs officers in Dover could say, "We are not making a profit for the trading fund and it is nearly the end of the month. We had better search everybody leaving the ships and make them wait for an hour or two." That example may be far fetched, but the principle is sound. The commercial activity that the Government seek to encourage among civil servants is precisely that which I am describing.

    Does the hon. Gentleman accept that the searches to which he refers involve contraband, drugs and so forth, none of which can be used to contribute to the trading fund? Perhaps the hon. Gentleman's example is a little wild in the context of the Bill.

    I would not defend my arguments all the way along the road. However, to some extent my argument highlights the philosophy of the Government. Perhaps not contraband or heroin but the odd bottle of whisky or item of clothing from Hong Kong may be taken through Customs without being declared.

    Before the hon. Gentleman gets too carried away, has he noticed paragraph 4.14 of the White Paper which says:

    "Thus for example the delivery of social security benefits, and tax assessment and collection are outside the powers"?

    I have noticed that and that is why I have restricted my argument to the Customs and Excise which does not carry out tax collection in the strict sense in which the Chief Secretary means it. When goods are declared that is what the Customs and Excise does, but I was talking about the aspect of Customs work that involves detecting goods coming into the country which are not declared where there is an intention to defraud on the part of the persons bringing in the goods.

    I do not wish to dwell on the Customs and Excise. Suffice it to say that it is not just about detecting contraband. Most of its task is to collect tax on goods which are properly declared. There is a trade-off between stopping the importation of illegal articles and ensuring that the proper duties are paid on other articles. It is also the job of the Customs officers at ports of entry to be civil to and not to inconvenience unduly the travelling public at ports of entry. At present there are long queues and much inconvenience is caused at ports of entry. It is tempting to say that any other system must be better, but that is not the answer. Nor is a trading fund the answer. Let ports of entry be properly staffed. Let there be more than one desk at immigration when 300 people come off a jumbo jet. Let the Government employ a few more Customs officers so that motorists taking their cars off the ferries at Dover, Folkestone and elsewhere can go through the formalities without waiting for one or two hours as they have to do on many occasions. That is the answer.

    The Government have said that the vehicle inspectorate is a number one candidate for a trading fund. A balance will have to be struck between charging for the services that it provides and proper attention to and testing of vehicles to ensure that the public are safe and can be assured that the inspectorate is performing its functions properly. If there is a trading fund, the chief executive will be given powers to run the inspectorate at a profit. There is a danger that if he deems that it would be difficult to set charges at the market level or a high enough level he will be tempted to cut corners and tell his employees, "Do not spend half an hour testing this vehicle. Can you not do it in 20 or 25 minutes?" The Government must address the danger that corners will be cut. They must assure Opposition Members and the country that it will not happen.

    The White Paper says on page 6 in paragraph 2.2:
    "The main aim of the Next Steps initiative is to deliver services more efficiently and effectively".
    We can call that phrase weasel words. I think that at one time or another we have all used that phrase. Such concepts are not easily defined. We interpret them in our own way. I have my own interpretation of performing a service efficiently and effectively. If we read on, we see that the paragraph says,
    "within available resources for the benefit of taxpayers"
    There we have another example of the Government's cost-cutting ethos. It is the Government who set the resources. They will set them at too low a level and will then set the impossible task—not only to the chief executive—to carry out the functions of the agency properly and responsibly. The Government will put enormous pressure on the civil servants in the agency. Employees will have to struggle simply to keep their jobs and do them properly and accurately.

    The same paragraph of the Command Paper says that agencies represent a new and distinctive development. That is what the Chief Secretary to the Treasury said in his opening remarks. There are problems with agencies. They depend on the director. A bad manager will mean, by and large, that we shall have a bad agency, if not immediately, certainly in due course.

    I hope that the hon. Gentleman agrees with me in that argument. If we are to have agencies it is crucial that the chief executives are of high calibre and have management skills to enable them to make a success of running the day-to-day affairs of the agency. They must also have sufficient integrity not to buckle to the Minister at his every whim.

    Government trading funds are intended for many agencies. Some agencies were not necessarily set up as a result of the Fulton committee but partly in an attempt to reduce the pay of civil servants. Agencies will result in regionalisation of pay, local pay additions and a lack of mobility for civil servants. Employees will not be able to transfer from one agency to another or return to the Civil Service as easily as they did in the past. I may be overstating the ease with which they could move in the past, but the onus is on the Government to assure us that if the Bill reaches the statute book and if agencies are set up, some with Government trading funds, the mobility of civil servants will be no worse than before.

    Mr. Kemp, the project manager of the Next Steps project, is effusive in his protestations that agencies will provide a better service to the public and improve morale in the Civil Service. I have no reason to believe that he does not believe that that will be so. However, it is implied that pay will have to be differentiated on geographical grounds. That has been demonstrated. There is a hidden implication that agencies would make the Civil Service a more commercial organisation, dedicated to making a profit at the expense of the public. Sometimes that is a precursor to privatisation in a future Parliament.

    All the factors that I have mentioned are worrying. Many people believe that the confrontation between management, which pursues profits, and employees has caused our economic decline this century. There is a danger that that confrontation will be introduced into the Civil Service.

    To take an example of what is wrong with British industry, at the end of last week the ambulance workers' unions suggested that there should be a 15-minute stoppage of work. They did not say, "Everybody out. It does not matter what the employers say." They said, "Let us stop work for 15 minutes. Ask your employer if he or she will allow you to stop work. If that is acceptable, stop for 15 minutes." What did British industry do? It did not say, "All right, we agree. we do not think that the ambulance men and women are right and a stoppage of 15 minutes would be detrimental to the country generally, but we agree that something should be done to tell the ambulance men and women and the Government to get together and to reach an agreement." They did not say, "Production cannot be stopped in essential industries." Nor did they say, "We do not mind, but work 15 minutes later." Instead, the Institute of Directors and the CBI said to industry, "You can sue the unions if they stop work for 15 minutes."

    That is an ethos which I do not want to see within the Civil Service. I do not want to see that confrontational style. By and large, the Civil Service is still administering the country on the bases of fairness and accuracy. By and large, civil servants take a pride in their work and aim for excellence in every respect. The Government have attacked that approach and made life difficult wherever possible.

    When the Government took office, the pay review unit was cancelled. There was an attempt to privatise the National Engineering Laboratory. A ban was placed on trade unions at GCHQ. Research institutes became demoralised. The Bill's provisions propose the spread of agencies and trading funds. I shall need much convincing by the Government that the Bill's provisions are not merely another way of cutting staff, introducing regional pay and more contracting out, and ending national pay bargaining.

    There we have it. The hon. Gentleman says, "All good things." He is honest. I hope that what I am saying does not constitute the Government's intent. I hope also that Conservative Members will disown the hon. Gentleman's intervention. As I have said, I believe that the Bill signals the ending of national terms and conditions of service.

    A code of ethics is to be introduced for the Civil Service. The loyalty of a civil servant to his or her Minister is to be absolute. I do not know how that can work. For example, Inland Revenue civil servants have statutory duties when they are dealing with the tax affairs of members of the public. Lawyers have legal obligations when discharging their functions. Statisticians have professional duties. How would we resolve a potential conflict?

    The Government are not interested in fairness, justice or morality. Thank goodness there are not many bent civil servants. Under the Government, however, many decent people will have to continue to wrestle with their conscience, as did Clive Ponting. I am sure that my hon. Friend the Member for Linlithgow (Mr. Dalyell) will agree that if a civil servant improperly authorises the release of letters written by the Attorney-General—

    Order. The hon. Gentleman is straying wide of the terms of the Bill.

    Yes, Mr. Deputy Speaker. I am coming to the end of my remarks.

    If a civil servant improperly authorises the release of letters—

    What my hon. Friend says is especially relevant to the fact, which I believe is unprecedented, that the First Division Association has formally protested to the Government about the new guidelines for relations between civil servants and the Government. It has argued that the Crown comes into the matter at some stage. Is it not extraordinary that the First Division Association should have complained about its treatment by any British Government?

    My hon. Friend has made an important intervention. What he says is symptomatic of the Government's attack upon the Civil Service over the past 10 years. It is certain that a civil servant who improperly authorises the release of letters written by the Attorney-General is as bent as the Minister who asks him to do it. I do not believe that civil servants should be put in difficult positions of that sort. We are to have trading funds—

    Order. It is difficult to relate the hon. Gentleman's remarks to the Bill.

    I shall seek to explain why they relate to the Bill, Mr. Deputy Speaker.

    There may be cost cutting in the operation of a trading fund. Vehicles may not be inspected properly, for example, because of the pressures that are on the trading fund. The chief executive may say, "We are not making a profit for the fund." That will put the civil servant in the same difficulty that other civil servants have faced in other areas of the Civil Service. That has been happening throughout the Government's existence. We are not faced with an isolated problem with the introduction and spread of trading funds. If the Government are serious, I accept that it is possible that trading funds could work in some instances, but the Government must convince Opposition Members that they are not pursuing their old dogma and attacks on the Civil Service of the sort that we have witnessed over the past 10 years. That is the central issue.

    The Bill will not do much for the Civil Service or the public. We suspect that clear intentions lie behind its introduction, and if that is so they will warrant unlimited opposition. Mr. Kemp, the Next Steps project manager, envisages three quarters of the Civil Service eventually being organised on an agency basis. When the agencies have been set up and the framework agreements instituted, the unions have not been consulted. Any hon. Member who wishes to pursue that matter a little further has to read only page 7 of House of Commons Paper No. 420, the 38th report of the Public Accounts Committee. It is there made pretty clear that the unions were not consulted properly.

    The next Labour Government will put matters right. Mr. Kemp will be given something else to do when that Administration takes office.

    I have been listening carefully to the hon. Gentleman for three quarters of an hour and I have not been able to establish so far whether it is the Opposition's intention to oppose the Bill. Will he make that clear?

    I shall come to that.

    The next Labour Government will not disband the agencies that have already been created but in all probability we shall not create any more. I say that because the nation's economy is in such a mess that there are many important actions that the next Labour Government will have to take. We shall then see how the agencies and the trading funds have operated. At that stage we may be able to take a more considered view.

    There is nothing wrong with the accountability to Parliament that is provided by the Bill. I have no quarrel with that. Besides publishing accounts, however, there should be scrutiny by Parliament over the day-to-day affairs of chief executives of agencies. That can be carried out by the Public Accounts Committee. Better still, however, the scrutiny should be available to every Member of this place. That could be provided for but at the moment I am not sure of the Government's intentions. I refer to page 18 of the White Paper. At the end of paragraph 5.10 there appears the following:
    "The exact format of individual reports, and their degree of detail, will be for the responsible Minister and the Chief Executive to decide in the light of circumstances and objectives."
    That is not good enough. I should like a more forthright statement about the Government's readiness to accept, first, accountability, and, secondly, scrutiny.

    There is one other initiative that the next Labour Government will take because the Bill says little about responsibility to the consumer. It makes mention of delivering a service but not of accountability. Agencies could he vehicles for a much better service to the public. It will be possible to give agencies guidelines on how they should go about their activities. Such guidelines would not be dictated solely by commercial considerations, and because of the nature of the agencies it will be easier both for Parliament and the public to judge them and their success—or otherwise. That particular aspect is one to which a Labour Government will pay close attention.

    The Bill has some good points, depending on which Government are responsible for enforcing its provisions. For that reason, the Government should publish a list of trading fund candidates as they have in respect of agencies. The Government should declare also how much privatisation is envisaged for the long term.

    I am speaking of the long term. I do not wish to delay the House, but there are quotations from the Prime Minister in which she stated that it was not possible to reveal what will and will not be privatised in the long term.

    As to the question of the hon. Member for Berwick-upon-Tweed (Mr. Beith), if the Bill receives its Second Reading, we shall press the Government in Committee on all the issues that I mentioned.

    6 pm

    I congratulate my right hon. Friend the Chief Secretary to the Treasury on his short and effective presentation of the Bill, in just 20 minutes. The hon. Member for Wrexham (Dr. Marek) spoke for nearly 50 minutes, and I feel sure that even his own right hon. and hon. Friends would like to see him shunted off into a trading fund. We might then be able to get on with our business.

    The Bill is an important, albeit technical, measure. At present there are 10 executive agencies employing 7,000 staff. The Bill makes provision for a further 42 agencies involving perhaps 190,000 people, so we are talking big business. I welcome the Bill, which is entirely in line with Government policy. Such services need to be more business oriented and geared to consumer demand and market forces. If matters of managerial judgment are involved, why should not more flexible arrangements be made in the agencies?

    Annex A of the White Paper "The Financing and Accountability of Next Steps Agencies" presents a long list of the agencies, but few of them concern the Ministry of Defence. One relates to the Royal Air Force, but there is no agency connected with either of the other two services. Perhaps my right hon. Friend will comment on that when he replies to the debate. There is scope within the Ministry of Defence for more initiatives of the kind that we are debating.

    The White Paper states that the Next Steps project manager will identify obstacles and tackle them. Can my right hon. Friend state what kind of business experience is available in the manager's office? Will it be manned entirely by civil servants? There is clearly a need for much greater business acumen, and that is particularly relevant in the light of paragraph 2.6 of the White Paper, which reads:
    "Before any Agency is established, the need for the activity is reviewed and alternative options, including contracting out the work and privatisation, arc examined."
    Will there be continuous monitoring of the prospects for privatisation, and will there be sufficient impetus and knowledge of the private sector in the Next Steps office to ensure that trading status is not a convenient and quiet alternative to privatisation? In many instances, privatisation may be the better solution.

    Paragraph 2.7 of the White Paper makes it clear that the Bill is a response to the work of the Public Accounts Committee. I take it that the Government are seeking to clarify the managerial role of trading agencies as distinct from the policy role of the relevant Ministers. When my right hon. Friend winds up, perhaps he will say whether all the Committee's recommendations have been implemented. If only some have been implemented, which recommendations have not been implemented?

    The outcome of each agency's work will be set out in the framework document and "made available to Parliament". What does that mean? How much scrutiny will there be? I accept, given the different natures of the agencies, that there will be some diversity in their relationships and closeness to Ministers. The key question is whether they will be equally accountable to Parliament.

    Under existing arrangements for the Civil Service, Departments are cash limited and subject to scrutiny by' the Public Accounts Committee and Treasury and Civil Service Select Committee. The new arrangements will be different. The trading funds established in 1973 allowed the Government to finance activities outside normal parliamentary control. Those funds have considerable independence, including the power to borrow. Paragraph 4.3 of the White Paper states:
    "Parliamentary control is obtained through:—the affirmative Order establishing each fund—the scrutiny of statutory annual accounts, and the power to examine the fund Accounting Officer."
    How much scrutiny of those funds by Parliament has there been? What evidence is there that they have been successful?

    The Government Trading Funds Act 1973 established a strictly limited number of well-known trading funds, such as the Royal Mint and her Majesty's Stationery Office. Will my right hon. Friend give an assurance that the much longer list of smaller and lesser-known bodies that will, under the Bill, be allowed to enjoy trading fund status will receive adequate parliamentary scrutiny?

    Paragraph 4.6 of the White Paper states:
    "Under the 1973 Act the accounts of a trading fund are audited by the Comptroller and Auditor General, who is required to lay them before Parliament together with his report. They are then published as a House of Commons Paper. This provides a basis for Parliament to consider the performance of the funds against its financial and other performance targets."
    We often hear those comforting words in our debates, but how much parliamentary scrutiny of the trading funds has there really been and how effective was it? I am not saying that I disagree with the Bill, but it is only right for this House to demand more clarification on Second Reading. The Bill is clearly needed, but as it gives the Government enormous powers Parliament has a right to the answers it seeks.

    I agree that the present definition of trading status is imprecise and I welcome the new formula, which was originally outlined in paragraph 4.12 of the White Paper. However, is not the new formula so broad as to include virtually anything? That may suit those who share my ideological standpoint, but that degree of breadth may concern other right hon. and hon. Members. It is important that my right hon. Friend the Chief Secretary to the Treasury reassures them when he replies.

    The rules of payment for the use of Government services in respect of social security benefits, for example, apply to fewer than half of all receipts and therefore will not be covered by the Bill. However, I should like to know how the figure of 50 per cent. was arrived at, for no explanation has been given. I would welcome my right hon. Friend's comments on that aspect. Why stick at 50 per cent.? Why not make it less, or more?

    I would appreciate further information on the way in which the Government intend to use what is a very generous enabling Bill. Paragraph 4.16 of the White Paper states:
    "The first criterion for assessing suitability is whether, as a matter of policy, the Government considers that levels of activity and expenditure should vary in line with demands and receipts."
    I do not claim to be a highly intelligent Member of Parliament, but I find it difficult to understand that particular phrase and shall be grateful for my right hon. Friend's elucidation of it. Also, if agency trading comes about, how will the arm's length relationship with other Government Departments be maintained? The White Paper does not provide sufficient assurances. How will staff performance be rewarded? Will there be increased pay or bonuses? That aspect relates to paragraph 18 of the White Paper. Finally, how will the external finance limit restrict business initiative by the staff operating in the trading funds?

    I apologise to my right hon. Friend for asking so many questions. In general, I welcome what is a worthwhile and useful Bill, which will do much to increase public confidence in the agencies. I wish the Bill every success in Committee and in its later stages.

    6.9 pm

    This is a useful Bill which will improve the present statutory provision for creating trading accounts within the public service.

    I listened for about three quarters of an hour to find out whether Labour Members would vote against the Bill, and I have come to the conclusion that no one will vote against it tonight. I assume that I am correct. It was clearly inadequate to continue to rest the creation of the funds on the basis of the old legislation, and the Government are sensible to introduce the Bill.

    Although I assume that it is the case, it is not clear from the face of the Bill whether the creation of any trading fund will require an affirmative resolution of the House. The Government have said that in the White Paper, and I assume that the combined effect of the two Bills is that it will require an affirmative resolution for any fund to be set up. If that is not the case, it should be put right during the passage of the Bill. The Government have said that that is their intention, and I assume that they will keep to that.

    A series of possible candidates for trading funds is listed in the White Paper. A number of those listed do not lend themselves to being trading funds because they do not fall within the just-quoted definition of activities in which there can be some variation of expenditure according "to demands and receipts." That applies to a relatively small number.

    When the candidates are considered, it is important that not only the trading fund operation is taken into account but how performance standards can be set for the funds. The worry is that agencies will not have adequate performance standards set and that standards will not be monitored. The White Paper says that the
    "Agencies will commit themselves to substantial and measurable improvements in performance, in terms of services and their costs".
    It should be made clear that the standards will be set at the beginning, and that they will weigh as heavily on the agency as the requirement to balance its books. If that is not so, we will simply get a perpetuation of inadequate standards or worse.

    The passport office has been referred to, and I hope that nobody has come to the conclusion that the existing system is working satisfactorily. No one who has observed the work of the Liverpool passport office during the past two or three years can argue that it is working satisfactorily, and that was the case long before the industrial dispute. I am glad that the Government Chief Whip is in his place because he was a Home Office Minister and many of the staff in his office were helpful to hon. Members seeking to chase up passports for constituents who urgently needed them. Passport applications were extracted from a mound of applications that had not been dealt with. I had a number of experiences that led me to believe that the organisation was not being run as a commercial organisation would be run.

    Late one Saturday afternoon I was on the telephone to an official in the Minister's office at the Home Office. I was working on a passport application. The Minister and civil servants in London were working on a passport application but no member of the management was in the Liverpool office to find out what had happened to it. I expect that they were out watching Liverpool or Everton. In any commercial organisation, in the middle of an industrial dispute, when it was unable to meet its requirements, the management would have been working at the weekends. That was not happening in the passport office. Long before the industrial dispute arose—and there were good reasons for that dispute—there was a state of near chaos in the Liverpool passport office, and they were unable to meet the heavy summer demand.

    The candidate organisations are generally monopolies and it is therefore important to ensure that there is a system to set performance standards. One cannot get a passport from anywhere other than a passport office. Those people who were shrewd enough to send their applications to the Belfast office before the dispute arose got their passports on time. In that respect it is not a monopoly, but one can get a passport only from the Government. A vehicle can be validly examined only by an inspector authorised by the Government. Many of the organisations listed in the White Paper are monopolies. We cannot simply create trading funds, and allow them to exploit their monopoly position to continue to provide a bad or an inadequate service. Therefore, it is important that trading requirements and strong performance standards are set and that they can be monitored by Parliament.

    Some of the organisations that are already working under the trading fund arrangements—for example, Her Majesty's Stationery Office—would not survive for long in the real market place, or the public sector, if they engaged in the pricing arrangements that they have now. The White Paper, "The Financing and Accountability of Next Steps Agencies" is printed by HMSO, which claims that it has 29 pages. It has only 25 pages, as four are blank. The price of those 25 pages is £4·60. That is supposed to be commercial enterprise working in the public service. Clearly there is a long way to go to get the level of efficiency that a non-monopoly commercial organisation has to achieve to survive, and I would welcome any attempt to achieve that.

    I emphasise that it is the monopolistic position that many organisations enjoy that makes it insufficient merely to set up a trading fund. If the Government-appointed agency is the only supplier—as it has to be for some things—it will take more than a trading fund requirement to ensure that the public get a satisfactory service, and that is what the Bill is about. The public should get satisfactory service at the lowest possible cost to the taxpayer, and the present situation does not ensure that.

    Perhaps the hon. Gentleman would like to reconsider his words. A satisfactory service is perhaps too low a standard. Let us have a good, first-class service for the public.

    I am prepared to accept that qualification, although to my mind a satisfactory service would be getting a passport within a week, but a good service is to get it by return of post. The way that the terms have been used shows how standards have slipped over the years. The currency has become debased. I accept that a stronger term than "satisfactory" is needed. We want to ensure that a good service can be provided at reasonable cost. The present arrangements in many areas of the public service have not ensured that.

    The trading funds system is appropriate to some areas of public service, but it will have to be backed up by strong performance standards, particularly when the Government are the monopoly suppliers.

    6.17 pm

    I believe that most right hon. and hon. Members welcome the Bill because it recognises that the role of the Civil Service is vital to Britain but cannot be divorced from the needs of the public; that has been one of the cornerstones of Government policy.

    The Bill goes a long way towards trying to relate the structure of the Civil Service more closely to the needs of the people through the various trading funds and the staff that manage them. I think that the hon. Member for Berwick-upon-Tweed (Mr. Beith) was trying to make that point in his lucid speech.

    The Bill sets out to expose Civil Service practice to some of the pressures of commercial practice, although it cannot be 100 per cent. successful in achieving that.

    We listened for more than 50 minutes to the hon. Member for Wrexham (Dr. Marek) and he made a lot of spurious points. One was the work of ADAS, which does not appear in annex A of the trading funds. Many of the points the hon. Gentleman made demonstrated that he does not know much about the subject.

    ADAS, in fact, brought in a charging mechanism to demonstrate the wealth of advice from a range of private bodies that is available to farmers, whatever the activity in which they are involved. Its introduction has shown that farmers, once they have to pay, prefer to pay for advice from private bodies that have kept up with modern developments in technology and work systems: the problem is not the charges, but the evidence that has emerged that what was required was not being provided. The hon. Gentleman should, perhaps, consult his hon. Friend the Member for South Shields (Dr. Clark), his party's spokesman on agriculture, I do not think that he will find much evidence of support for the suggestion of a subsidy to enable ADAS to provide a free service, as it used to.

    It has become fashionable to regard civil servants as a cohesive group. We should not do so, however, for they are involved in a range of different activities, as is demonstrated by the number of possible agencies listed in annex A. They may be research or investigative scientists, clerks, historians, administrators or members of many other disciplines, and thus cannot be lumped together. All the agencies and candidate agencies have some impact on the public, and most have a considerable impact: the vast majority of staff are in employment or social security offices.

    The overwhelming majority of civil servants are highly competent and capable. I do not subscribe to the theory that they are workshy and could not survive in the private and commercial sectors, although I know that many people hold that view; I had a good deal to do with civil servants in certain sectors before I came to the House, and I believe that the Bill will show that they are as competent as I consider them to be. The problems of poor service and insufficient accountability have been caused by the system that has operated for so many years—a system that stultifies initiative, discourages innovation of any kind and encourages people to believe themselves immune from accountability, disciplinary measures and even dismissal.

    By allowing trading funds to be set up, the Bill will go a long way towards solving those problems, although it is bound to cause uncertainty among staff: everyone fears change, and many civil servants will doubtless wonder what that change holds for them. While I do not dismiss their anxiety, I believe that in time it will be shown to be groundless. Trading funds will help to improve accountability, and will create conditions much more akin to those in the private and commercial sectors—conditions in which the individual can prosper. They will assist personal development and encourage the innovative processes that are so essential to a commercial operation.

    I have, however, some anxieties about the Bill. First, I am keen that, where appropriate, civil servants who run the trading funds should be given terms and conditions of employment comparable with private-sector operations in the same sphere. However, while that may involve a considerable review of salary structure, it may also mean a weakening of the position of such staff—for instance, their protection against dismissal. We should remember that the Ibbs report criticised the centralised pay and conditions rules of the Civil Service for being outside the control of most managers and
    "structured to fit everything in general and nothing in particular".
    I hope that the Government will not simply conclude that, with agency status, those responsible for operating the trading funds will still be civil servants, with Civil Service conditions and pay scales. Some of the agencies will have to compete for staff and in terms of the quality of their service, just like private-sector operations.

    My other concern is competition. The hon. Member for Berwick-upon-Tweed has already made some of the points that I wanted to make. Simple responsibility for a fund will not achieve all that we would wish; financial targets—for returns on investment, for example—will not bring about all the desired results. We must go as far as we can towards creating competition, perhaps even breaking down some of the agencies into two or more groups so that they can compete among themselves—on a regional basis, for instance. We must try to engender competition wherever possible.

    After a few years we may find that some of the agencies are not really needed, at least within the public sector, and if that happens so be it. The hon. Member for Wrexham wanted an assurance that the Government's proposal was not the precursor of privatisation or even abandonment. Perhaps, in view of the party that I represent, it is not surprising that I find it difficult to understand the ideology that the agencies should continue regardless, and that we should not consider privatising them. Such is the rate of change in Labour's policies that before many moons have passed its members may well suggest privatisation themselves—not, I hasten to add, that they will have the opportunity to do so.

    I feel that we should question some aspects of the agencies listed in annex A, which will be prime candidates for the establishment of trading funds. The hon. Member for Berwick-upon-Tweed mentioned Her Majesty's Stationery Office, and I should like to know why it is necessary for such an organisation to be in the public sector. As the hon. Gentleman emphasised, some of its provision can hardly compete with what we would expect from a private-sector equivalent.

    I also wonder—this will be dear to the heart of my right hon. Friend the Minister for the Civil Service—why we need a special college for civil servants. If we wish to encourage civil servants to operate in a commercial environment, they should be trained by people who already work in such an environment, rather than by people trained under the system that we are trying to change.

    Is not investment in the training of British managers in the private sector very low compared with our European competitors? The private sector's record of investing in the training of British managers is very poor.

    As one would expect, the hon. Gentleman's comments are some years out of date. Management training in the United Kingdom has gone forward by leaps and bounds during the past few years. Private sector investment in training has increased by at least 50 per cent. in the last three or four years. That fact cannot be disputed. The hon. Gentleman needs only to check with the Confederation of British Industry, if he doubts it.

    I do not suggest that British industrial management training right across the board is adequate. However, the ability of commercial training firms to train to the highest level has been proved throughout the United Kingdom. The companies that provide private sector management training could also provide it for civil servants.

    The Queen Elizabeth II conference centre is a building of renown, especially to those of us whose offices are in Dean's yard or elsewhere in the conference centre's vicinity. I was surprised to find that it is listed. I wonder why the public sector is running the conference centre. I hope that in the near future it will be funded by a trading fund, to be followed shortly afterwards by privatisation.

    I have already referred to the employment service as being one of the most important potential candidates for financing through a trading fund. It employs 34,000 civil servants and it is involved with the public. Members of Parliament receive many letters of complaint from constituents. They complain about how they have been dealt with by employment service employees. It is an essential part of the public sector, but it must remember that it is there to serve the public.

    The fuel suppliers branch may employ fewer than 50 people, but one has to ask why there should be a fuel suppliers branch to provide a bulk fuel purchasing service to Government Departments. Surely a trading fund ought to be established so that the fuel suppliers branch can be got rid of altogether. A multitude of private sector companies could do that job.

    Much has been said about passport office delays, but nothing has been said about Land Registry delays. During the last few years I have received many letters from people who have complained bitterly about Land Registry delays. When people want to move from one part of the country to another—usually to my constituency because of the thriving economy and low levels of unemployment—they find that it is difficult to do so. Delays are due to lack of accountability. Improvements must be made.

    Property Holdings, which is responsible for the management of the Government's property portfolio, ought to be run in the same way as the private sector runs such a business. If it is cost effective for the Government to have their own property holdings, that is fine; I have no fundamental objection to that. However, if it is to be cost effective, Property Holdings must be staffed and run in such a way as to make it competitive with the private sector. A trading fund would ensure that it could be compared favourably with the private sector.

    As for the Training Agency—formerly the Manpower Services Commission—I had a great deal to do with that organisation before I became a Member of Parliament. The Training Agency is venturing into an area that, so far as I know, is unknown to the rest of the Civil Service. There has been the introduction of private management, through the development of training and enterprise councils. Private industry will set up its own councils. Some members of the Training Agency's staff will be seconded to the training and enterprise councils to carry out administrative, operational and executive functions. Civil servants will be responsible to the private sector management. It will be interesting to watch the experiment over the next few years. It will provide civil servants with the opportunity to demonstrate all those characteristics that I described earlier as being essential if the operation is to be commercial and serve the public.

    Despite the implications of some of my remarks, I believe that the majority of civil servants are competent. They have the ability to compete in a much more commercial operation. Ultimately, however, their job is to provide a service to the public, whether it be across the counter at a Department of Social Security office or behind the scenes in a research laboratory. This enabling Bill will allow most of the agencies to operate in a way that will demonstrate clearly how effective and efficient they are. I hope that in a few years time we shall be able to introduce a tranche of Bills to privatise some of the agencies. As a first step towards privatisation, I welcome the Bill.

    6.36 pm

    This enabling Bill will provide the Government with enormous powers. Therefore, we are entitled to probe the Government's intentions. I should like to follow what was said by the hon. Member for Cambridgeshire, South-East (Mr. Paice) by asking a few detailed questions about some of the entries in the annex to the White Paper.

    According to annex A, the Resettlement Agency
    "Provides resettlement units for people without settled way of life."
    The social security IT services directorate
    "Provides computer and communication technology services for the DSS."
    The social security benefits administration
    "Assesses, issues and administers social security benefits."
    According to the Chief Secretary's speech, some of those services could be brought within the ambit of the Bill.

    The Government announced in November the relocation of Social Security and Health Service departments to Leeds, involving 2,000 members of staff, from the chief executive down. That move has been welcomed in Leeds, and I hope that it is a sign of the Government's commitment to a regional policy. It is a key regional centre and the staff will get a warm Yorkshire welcome when they arrive in Leeds.

    The Chief Secretary said that Government Departments are complex. Will the Resettlement Agency and the social security IT services directorate and the social security benefits administration, which are candidates for agencies in under Next Steps, be funded as trading agencies? Is it intended that commercial-style accountancy should be introduced in those departments?

    The Resettlement Agency provides homes for people with no fixed abode. They will pay rent, for which they will get a receipt. Paragraph 4.14 of the White Paper says:
    "The powers extend only to bodies which generate receipts in respect of goods or services provided. Where there are no such receipts the powers could not be used. The effect is to exclude areas of Government where the payment is not directly related to the provision of the goods or services, or where such payments constitute less than half of the body's revenue … Thus for example the delivery of social security benefits, and tax assessment and collections are outside the powers."
    I wonder whether the reference to collection only involves tax and whether all social security benefits are clearly outside the remit.

    The social fund was a shift of policy from benefit as grant to benefit as loan—a loan which has to be repaid from benefit. I hope that there will not be a shift to commercial-style accounting in that area. Social security offices should offer a fair, efficient and just service to claimants who, through no fault of their own, need to make a claim. They have often been made to feel that they are victims or that they have committed an offence.

    In a leader last January, The Times said:
    "Last year one of the brighter sparks in the Social Security Department introduced an impressive prospectus for change. It proposed to remove from London the processing and basic clerical tasks occasioned by claims for income support … It also urged the treatment of claimants not as enemies of the system but as citizens deserving efficient administration."
    I hope that that will indeed be the case. The Department of Social Security recently introduced a new logo for its leaflets. It appeared as a smile. Some might argue in other debates that that smile is somewhat ironic in the light of benefit reductions. But as the Department is to move to the friendlier location of Leeds, let us hope that the service will be much more efficient and friendly rather than shift towards a business intent on shaming those who claim benefits. That is the type of improved management and efficiency that we would like.

    I should be most grateful if the Chief Secretary would assure me that the Government have absolutely no intention, now or in the future, that any part of social security provision should be covered by this Bill.

    6.42 pm

    This is an excellent Bill. It takes forward much of what the Government have already done to reorganise the Civil Service. I fully support it and urge the House to vote for its Second Reading.

    The hon. Member for Wrexham (Dr. Marek) was at pains to tell us that the Bill is worrying. More than anything else, the Bill shows up the differences of attitude between the two sides of the House. We look for efficiency and better cost management and see a role for the private sector. The Opposition want central control and maintain that the civil servant is always right and, as a result, must be left alone. If the hon. Gentleman plans to be a Minister, I urge him to be subjected to a compulsory session of "Yes Minister". Sir Humphrey Appleby could teach him quite a bit. Civil Servants can look after themselves extremely well.

    When we consider the delivery of necessary services by the Government, the need for improvement is hammered home to us. I am a lawyer and must say that the Land Registry is a complete shambles. Solicitors carrying out conveyancing experience great difficulty getting the proper documents, and getting certificates for leases takes far too long. House transfers are delayed most unnecessarily.

    The same can be said for the driver and vehicle licensing centre at Swansea. Any solicitor or barrister who has applied on behalf of his client for a copy of a driver's licence for the magistrates' benefit and anybody who has applied for a new copy of his licence will know of the terrible problems there. The Liverpool passport office is on my constituency's doorstep. Many of my constituents who wanted to go abroad on holiday were caused great anxiety last year by the dispute there. That office has a history of inefficiency. Such difficulties must be tackled. The White Paper is an excellent document, and the Bill based on it is the way forward.

    The hon. Gentleman mentioned the Land Registry. Does he agree that one of the difficulties, to say nothing of the lack of resources for additional staff, is that people who try to sell homes to other people may find that they are involved in litigation about who pays the ground rent? Every day of the week, thousands of transactions involving the sale of ground rents are made in London. That causes huge delays in the Land Registry. The Government have failed to prevent such speculation, which creates difficulties for the Land Registry and the hon. Gentleman's clients.

    The hon. Gentleman is right to say that the transfer of freeholds, when the occupier is a leaseholder, is a big problem. I am sure that he is aware of the Lord Chancellor's proposals, based on the Australian and New Zealand model, to introduce a new style of ownership for flats in London. That will eventually do away with the problem he mentioned. The hon. Gentleman and I experience the same difficulties in our constituencies. The same is true for much of the north of England. I accept the need for reform, as does the hon. Gentleman.

    The Lord Chancellor's proposals relate exclusively to transactions in London. They do not affect transactions in the rest of the United Kingdom. This is not a party political issue. The House should find time to resolve this difficulty, which affects millions of potential purchasers each year.

    As an active member of the all-party leasehold reform group, I hope that the hon. Gentleman will join us—

    We are working with the Building Societies Association to bring forward a proposal such as that—

    I said that the hon. Gentleman is an active member. He will come along and help.

    The examples I have mentioned demonstrate the need for Next Steps agencies. A trading fund is the logical step for many of them—they provide services directly to the public.

    The White Paper draws attention to the problems of monopolies. We should consider that problem carefully. I endorse what my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) said about the list of Next Steps agencies in the back of the White Paper. Do the Government need to be involved in many of the functions listed there? Could they not be done equally well by the private sector? I welcome the fact that the Government are considering privatising those functions in future. Many of them could be carried out just as well in the private sector.

    The trading funds that will be set up for the Next Steps agencies will not in any way reduce accountability to Parliament. Paragraph 5(1) of the White Paper states:
    "Next Steps will involve no diminution in Ministerial accountability to Parliament. Indeed, the creation of Agencies will clarify managerial responsibilities and reinforce accountability to Ministers and to Parliament."
    The majority of chief executives will be former civil servants. The hon. Member for Wrexham says that chief executives will feel under pressure to produce results and will not feel able to satisfy the public's need for service. But civil servants feel the same pressure and the same need to satisfy the public's requirements at the moment. That will not change except that the agencies will be treated individually. The Comptroller and Auditor General will publish a report which, along with the accounts, will be brought before the House of Commons so that we can scrutinise the operation of that part of the Civil Service. Today, much of it is subsumed into the whole and we never know how efficient individual parts of the Civil Service are. The report will provide us with a good opportunity to look at it. The funds will be created by affirmative order of the House of Commons and the chief executives will be subject to examination by the Comptroller and Auditor General and no doubt will be called before Select Committees when it is considered that matters need to be investigated by the House. In future these matters will be safe in the hands of the House and Ministers.

    I now turn to more parochial considerations. Next Steps agencies will be important for the provinces of England, Wales and Scotland because they will be self-contained units with chief executives responsible directly to Ministers, so there is absolutely no reason why they need to operate in the south-east. Hon. Members on both sides of the House who represent northern constituencies will agree that we have a classic opportunity to move those agencies into the provinces to create jobs in areas of high unemployment.

    I agree entirely with my hon. Friend. There is no reason why many of the agencies should not move north. A number of Department of Social Security offices are located in Blackpool and before it was privatised the new headquarters of Girobank was set up in the constituency of the hon. Member for Wigan (Mr. Stott) close to the constituency of the hon. Member for Makerfield (Mr. McCartney). The Government have successfully transferred Civil Service jobs from the south-east to the north. That must continue. Given the technology and the communications that exist today, there is no reason why all the major offices of state should be located in the south-east of England. Next Steps agencies will be the beginning.

    Let me finish this point.

    In the past six months I have had the privilege to serve in the Northern Ireland Office as a parliamentary private secretary. A similar situation exists in the Welsh Office where Ministers are based in London but can communicate with civil servants by video and by television link so that they can have meetings with civil servants who are 100 or 200 miles away. Those jobs will provide much-needed prosperity in the regions and should move out of the overcrowded south-east where Conservative Members are desperate to protect the green belt. Up north we have the infrastructure, the housing and the quality of life to absorb those jobs.

    I note that the Minister for the Civil Service is in his place. I hope that he will take on board my comments. Part of St. Joseph's college, the seminary at Upholland, is in my constituency. It is available for such an organisation as a Next Steps agency and is close to the M6 and the M58. A Next Steps agency could be set up in a class II listed building, a magnificent Victorian building in 180 acres of parkland providing a superb standard of life, as anyone living in my constituency or in that of the hon. Member for Makerfield would agree.

    I agree that hon. Members on both sides of the House should continue their efforts to achieve the transfer of jobs northwards and to create initiatives to provide new jobs in the north. The hon. Gentleman and I have recently been involved in the privatisation of Girobank. He supported the privatisation process which nearly lost us jobs in the north-west from Britoil in Wigan. The battle was not only about privatisation but about retaining the jobs in the north-west after privatisation. The hon. Gentleman was silent in the argument about privatisation and the possibility of jobs being transferred. I shall not go into his difficulties at Upholland and the fact that his constituents are up in arms about the possibility of development, commercial or otherwise, at the seminary. It may be difficult for the hon. Gentleman in view of his small majority which will not be helped by his speech today as most of his majority is probably made up of civil servants in the passport office in Liverpool.

    The hon. Gentleman referred to the problems at Upholland. Perhaps he will appreciate that it is an ideal centre for a Next Steps agency. West Lancashire district council, which is Conservative controlled, has rejected the proposals by the church to develop in green belt and recognises as I do that that college could be more sensibly used for such a development.

    The trading fund which underpins the Bill will provide a financial framework which will cover the operating costs, receipts, capital expenditure, borrowing and net cash flow of the Next Steps agencies. Those that are suitable will find that it will provide a more commercial and disciplined approach to the delivery of Government services coupled with a greater accountability to Parliament for the results achieved. Where it is appropriate for such trading funds to be attached to Next Steps agencies—and that will not always be the case—it will result in improved performance and improved provision for the public which they will welcome and which I am sure will be welcomed by all Members of Parliament.

    I was rather surprised because, to be perfectly frank, I thought that my hon. Friend the Member for Linlithgow (Mr. Dalyell) was here before me.

    6.58 pm

    It is a most unusual compliment, and it will be repaid.

    May I make an extremely careful and hesitant comment on one of the matters raised by the hon. Member for Lancashire, West (Mr. Hind)? He referred to civil servants and jobs in the new agencies. I do not know all the facts, but I should like to ask one question: are we sure that it is ethical these days for Mr. Patrick Brown of the Department of the Environment to go out of the Civil Service to the National Freight Corporation, back into the Civil Service, and now out again to the Property Services Agency? I stress that this is not a personal attack. I do not know all the facts, but it is high time that a Minister made a statement on the new ethics of the Civil Service.

    I remember an enormous row when Sir Clifford Jarrett, who was permanent secretary at the Ministry of Pensions, got a job with a pension fund company. The then Cabinet Secretary had to decide whether his appointment was proper. Sir Clifford Jarrett had left the Civil Service, but it now appears possible for people to join, leave and rejoin the Civil Service.

    This afternoon I asked the Attorney-General whether he would discuss with the director of the serious fraud office the propriety or otherwise of Coopers and Lybrand being commissioned by the Government to do a report on extremely important institutions—the Property Services Agency and the Crown Suppliers—when certain key people who are former employees of Coopers and Lybrand are the leaders in the management buy-out. That raises some pretty serious questions about governmental ethics. I see the Chief Secretary to the Treasury knitting his brow, but these are extremely delicate matters. A statement should be made on exactly what has changed in Civil Service ethics.

    It is not every Saturday evening that I ring No. 10 Downing street, but I did so last Saturday to leave a message with one of the Prime Minister's secretaries. I said that in my opinion she should have made a statement to the House—the Minister of State, Privy Council Office has guessed on what subject—on a matter of enormous sensitivity, the protest by the First Division Association on guidelines. The First Division Association does not lightly protest, so when it does—I am not disparaging the Minister of State or being personally rude to him—the head of the Civil Service should at least make some comment.

    In my speech I may ask some naive questions that may appear rather simple, but the Labour party has been in opposition for a long time. There was a time when many Members of the Opposition had recent ministerial experience, but since 1979, for reasons of which we are all aware, there has been a great change. I am not making a party point, but I think that, with the exception of my hon. Friend the Member for Bradford, South (Mr. Cryer), I am the only Opposition Member present who has any experience of government. That lack of experience makes it much harder for Opposition Members to understand the pros and cons of what a Government are doing. Having been exiled between 1974 and 1979 over devolution, it is more than 20 years since, as a parliamentary private secretary, I saw the inside of a Ministry.

    I hope that hon. Members will forgive a little history, but I am interested in not only the Property Services Agency but the general subject. I recollect clearly—in another context I have had to work on the papers relatively recently—that the late Sir Otto Clark and the late Sir Leo Pliatzky, who were formidable civil servants, thought that they had persuaded a number of members of the Labour Government to set up something equivalent to the Property Services Agency. They certainly succeeded in persuading Lord Armstrong of the Midland bank, not Lord Armstrong of Ilminster. When those people said that the Government had to be themselves involved to make good decisions, they were not making simply a party political point.

    There is a further general point to which I hope that the Chief Secretary will respond—I know that he is deeply interested in such matters. I shall leave out the privatisation of businesses because I understand that there is a party political difference over the privatisation of electricity and water, but in the case of the Crown Suppliers and the Property Services Agency, is the Chief Secretary absolutely persuaded that he is not trying to privatise, not a business, but a governmental function? Who will make the judgments that the Government must make?

    I refer to a question that the Chief Secretary answered today. It says:
    "To ask the Chancellor of the Exchequer what architectural and architectural-related staff he has in the Treasury to make technical assessments of decisions by other Departments to use agents other than the Property Services Agency."
    The first answer was a holding reply on 21 December. I make no complaint about that other than to say that if those proposals, which will begin to be considered upstairs tom