I also congratulate my right hon. and learned Friend on increasing the expenditure for Scotland, once again increasing the quality of life in Scotland beyond that of any other part of Europe.
Mr. Rifkind : I am grateful to my hon. and learned Friend. The Government attach great importance to Scotland's natural and national heritage and the Historic Buildings Council, so ably chaired by my hon. and learned Friend, makes a splendid contribution, supported by the whole of Scotland, to ensuring a splendid future for Scotland's national heritage.
Mr. Adam Ingram (East Kilbride) : Does the Secretary of State agree that one of the real tests of his announcement will be whether homelessness is reduced and the housebuilding programme is stepped up? What specific sums has he allocated to those worrying and growing problems, and by how much does he estimate that homelessness and housing waiting lists will be reduced over the next four years?
Mr. Rifkind : I said that resources to Scottish Homes were being increased by £36 million, an increase of some 11 per cent. In addition, we have provided £11 million particularly for the partnership estates, which are
Column 329primarily local authority council estates. The £36 million will be divided between the local authority allocation and Scottish Homes. In addition, local authorities will receive an increase in their net allocation for their capital programmes of about 15 per cent. That reflects the difficulties that would otherwise arise from the reduction in receipts from council house sales. I make no apology for repeating that local authorities also have an obligation to do what they can to increase their resources, as the new towns have done so successfully.
Mr. Robert Hughes : Does the Secretary of State recall that, in previous years when he has come to the Dispatch Box and made glowing announcements about his generosity, it has almost always been followed after Christmas and the new year by Members for Aberdeen and north-east Scotland telling him that he grossly underestimated and misrepresented the sum which was to be available to my part of the country? Will it be the same this year? Can he give us the figures for the north-east? Can we spare ourselves our annual trip down to see him to get justice for our part of the country?
Mr. Rifkind : Naturally, each local area, not just the north-east, would like to get the lion's share of the resources available. Today's announcement is of the global sums available. Over the next few weeks my hon. Friends and I shall determine the individual allocations to individual local authorities. I can assure the hon. Gentleman that we shall continue to treat fairly the needs of Grampion region and district councils in the north-east. Each local area believes that it should have more than any other area, but that is not always possible, as the hon. Gentleman will appreciate.
Mr. Alex Salmond (Banff and Buchan) : When will the Secretary of State take time to educate English Tory Back Benchers and some Scottish ones about the enormous flow of funds for defence procurement, mortgage interest tax relief and transport subsidies which are siphoned off into the already overheated economy of the south-east but mysteriously do not appear in any of the identified public expenditure tables? Is he aware that an analysis from the Library shows that from his period of office to the end of the forecast period in 1992 the Scottish Office budget will increase by 39 per cent., overall United Kingdom public expenditure by 42 per cent. and the Welsh Office budget by 57 per cent.? Why is it that every time the Secretary of State claims a miracle on public spending it turns out to be a mirage?
Mr. Rifkind : If the hon. Gentleman is advocating on behalf of his party levels of public expenditure for Scotland which correspond to those of either England or Wales, he must explain to his constituents why he advocates major cuts in the present level of provision for health, housing, education and roads, all of which are substantially higher for Scotland than for England or Wales. He should escape for a moment from the paranoia associated with his party.
Several Hon. Members rose--
Column 330principle of toll roads from Edinburgh to the M74? Is it because there is a fall in real terms in the money allocated to transport between 1991 and 1992?
Mr. Rifkind : The hon. Gentleman is misinformed. There is no proposal for toll roads from Edinburgh to the M74. There are several projects that may include the use of tolls in various parts of the United Kingdom. Our recent discussion document on routes south of Edinburgh suggests that there may be a case for a fast link between part of the M8 and the M74. The proposal has not been previously suggested by other interests, nor does it appear in the existing roads programme. Rather than defer such a project for the good number of years that would be required, given our other transport priorities and initiatives, we have suggested that it might be worth considering whether the fast link could be provided in the form suggested. I stress that it is only a proposal at this stage.
Mr. John McAllion (Dundee, East) : The Secretary of State told us this afternoon, as he told us in his statement last year, that the health programme has been identified as an area of priority. Yet we learned only this week that during the past year 200 patients at the Lennox Castle psychiatric hospital suffered undernourishment as a result of staff shortages. He can say what he likes at the Dispatch Box, but how does he expect anybody to believe him when so much evidence in Scotland flies in the face of his claims?
Mr. Rifkind : I share the hon. Gentleman's concern about reports of undernourishment at that or any other hospital. Suggestions that it is due to staff reductions cannot possibly be justified. Apart from anything else, staff numbers at that hospital have increased rather than decreased recently.
Mr. Ron Brown (Edinburgh, Leith) : Although the Secretary of State has been addressed as Father Christmas, does he not understand that there is no sanity clause in his statement? He has told us that Scottish Homes and local councils should sell public housing in Scotland, but the Government, through the quango, the Scottish Development Agency, have bribed Barratt's with more than £300,000 to develop the West Pilton Circus site in my constituency. Worse still, they have kept that secret and they will not divulge the facts, but it is all true. Why does not the Secretary of State speak up, or does the kick-back system still operate? Does he support it as part of the capitalist system?
Mr. Rifkind : If the hon. Gentleman wants to pursue that point, he should either put down a Question or write a letter to either myself or to my hon. Friend the Minister concerned, as his question today is somewhat confused.
Mr. Alistair Darling (Edinburgh, Central) : Does the Secretary of State recall that, last year, he painted an optimistic picture of National Health Service funding ? I have in my possession a confidential memorandum that shows that Lothian health board has stopped filling vacancies because it does not have the cash to do so. Surely the promises that were given last year were untrue. What reason do we have to believe the Secretary of State this year? A lot of the money that he has announced today will be used to oil the wheels of privatisation and to introduce the health reforms that the Government are so keen to support.
Column 331Mr. Rifkind : The hon. Gentleman should be as aware as anyone that the introduction of, for example, competitive tendering in Lothian and elsewhere has led to substantial savings which have remained with the health boards and have been used by them to improve services for their patients. It is true that some of the resources announced today will be used for the NHS review. That is right and proper, because that review will be a further means whereby we can improve the quality of service and therefore the well-being of patients in Lothian and elsewhere in Scotland.
Mr. Gavin Strang (Edinburgh, East) : Will the Secretary of State admit that, against the background of the Government's high-interest rate economic policy, and taking into account the likely level of inflation next year, the public expenditure he has announced will not be sufficient to stop unemployment rising again next year in Scotland?
Mr. Rifkind : Before the hon. Gentleman reaches such conclusions, he should look at some recent reports and surveys. This morning The Scotsman quoted the chief economist of the Royal Bank of Scotland as predicting that economic growth in Scotland will outstrip the rest of the United Kingdom next year ; presumably because, in part, the effect of high-interest rates, although undesired in any part of the country, has its greatest impact where mortgages are highest--in the south-east of England. That report this morning corresponds with reports and surveys by the Fraser of Allander Institute and the Scottish Confederation of British Industry, all of which point to the fact that growth in Scotland is likely to be higher than the United Kingdom average for the forthcoming year.
Mr. Tom Clarke (Monklands, West) : Did the Secretary of State consult COSLA on his statement, or does he plan to do so? In view of the absence of any reference in the statement to community care, how does that match with the Government's rhetoric on the subject? There are problems of homelessness, poverty and fuel poverty as well as problems arising from the notorious social fund, and social work departments experience those problems day after day. What recognition has the Secretary of State given in the statement to those social work departments that are trying to operate and to respond to people's needs under the sort of pressure that they know, and the Secretary of State should know, to be totally unacceptable?
Mr. Rifkind : Central Government provision for social work is planned to rise from £16 million in 1991 to £20 million in 1992- 93, which is a substantial increase. As for consultation with the local authorities, my hon. Friend the Minister with responsibility for housing met COSLA on Friday and discussed the housing allocations with it.
Dr. Jeremy Bray (Motherwell, South) : Will the Secretary of State confirm that he has received a major hospital building programme from the Lanarkshire health board? Will he confirm that it includes a proposal for a new district general hospital in the Motherwell district to replace the temporary wartime emergency hospital which is incapable of development because of mining subsidence on the site? Will he confirm that there is room for a start at least on the planning expenditure on this hospital in the next financial year?
Mr. Rifkind : Proposals such as those to which the hon. Gentleman refers have not yet been drawn to Ministers' attention. However, I assure the hon. Gentleman that when that happens I shall take into account the point that he has made.
Mr. Nigel Griffiths (Edinburgh, South) : How does the Secretary of State justify the cut in public services of £100 million revealed in last month's Autumn Statement--table 1.12, page 30--and what confidence has he that the future spending increases he announced will bring about the desired results over the next year?
Mr. Rifkind : I have already informed the House that expenditure in Scotland, for which the Scottish Office is responsible, will increase by more than £500 million next year compared to outturn for this year. That answers the hon. Gentleman.
Mrs. Margaret Ewing (Moray) : In drawing up his budget allocation for the Scottish Development Agency and the Highlands and Islands Development Board, did the Secretary of State take special account of the possible need to assist the hard-pressed fishing communities on the coastlines of Scotland?
Mr. Rifkind : I share the hon. Lady's concern about the problems faced by the fishing industry, and I have already made clear my total opposition to the latest proposals from the Commissioner in Brussels with regard to haddock quotas for the industry. Clearly we shall have to await further developments to see exactly what the scale of reduction in fishing entitlements might be. The hon. Lady can rest assured that we shall do our best to protect the fishing communities from any unreasonable proposals made by the Commission.
Mr. John Maxton (Glasgow, Cathcart) : Does the Secretary of State seriously believe that the people of Scotland will be deluded when he uses terms such as "superb", "generous" and other over-flowing adjectives to describe the settlement when examination of the figures will show that the settlement will mean a policy of cut, cut and cut again? Is it not clear that his evasively complacent answers to my hon. Friends' questions about homelessness in Scotland show that he is cruelly and callously indifferent to the plight of thousands of Scots with no roof over their heads at this time of year? Is he not aware that to use the increased allocation to Scottish Homes is totally irrelevant because Scottish Homes has no statutory obligation to the homeless? Does not the recent Shelter survey show that there is a major crisis of homelessness in Scotland which he can solve only by dealing with it as his right hon. Friend the Secretary of State for the Environment did--by allocating special funds for the purpose and allowing local authorities to get on with the jobs that they are best able to do?
Mr. Rifkind : Only the hon. Gentleman could describe an increase of £500 million as a cut. He seems unaware of the work that Scottish Homes is doing and proposes to do with its resources. Far from operating in a vacuum separate from local authorities, Scottish Homes already works closely with many local authorities in Scotland, and a substantial proportion of its resources is being used in the local authority estates in co-operation with local
Column 333authorities. How the hon. Gentleman, representing as he does the Castlemilk estate, can be ignorant of that fact is extraordinary when Castlemilk is--
Castlemilk is one of the partnership areas into which substantial new resources are being put in co-operation with local authorities. The hon. Gentleman does his constituents a grave disservice by appearing to be ignorant of that fact.
Mr. Seamus Mallon (Newry and Armagh) : On a point of order, Mr. Speaker. I think we would all agree that one of the great strengths of the House is the way in which it respects and defends the position of every person in it, however lowly or exalted. I fully agree that you, Mr. Speaker, cannot be responsible for the ill manners and discourtesy sometimes shown by Ministers to hon. Members. I sat here yesterday and today and watched the hon. Member for Edinburgh, Leith (Mr. Brown) being treated in a discourteous manner by a Minister. When a pattern like that is established, it becomes the business of the House. I ask your ruling, Mr. Speaker. Would this be the time to ask the Leader of the House and the Government Chief Whip to remind Ministers that, when they offend against one person in that way, they offend against the integrity of the entire House?
Mr. Winnick : The explanation is that on many occasions you have asked hon. Members to withdraw or apologise. As you know, hon. Members respond to the Chair. The Secretary of State for Trade and Industry said that the supplementary question of my hon. Friend the Member for Edinburgh, Leith (Mr. Brown) was out of order. You accepted that it was not out of order, or you would have pointed it out. Although you cannot force Ministers to apologise if what they say is not directly out of order, under those circumstances should not the Secretary of State have apologised? By not apologising, has he not shown contempt to the House and to you?
Mr. Speaker : As the House knows, I am not responsible for what is said, provided that it is in order. Yesterday I did not hear the question from the hon. Member for Edinburgh, Leith (Mr. Brown), because, as I explained, the microphones are out of date. I hope that in due course they will be replaced. However, the hon. Gentleman was heard today, perhaps because I suggested to him that he move his place.
Mr. Ron Brown (Edinburgh, Leith) : On a point of order, Mr. Speaker. I would like to raise a separate matter concerning the Secretary of State for Scotland. He said that I should table a question to him on Barratt's. I have done that, but I am not satisfied with the reply, and neither are my constituents. If it is a cover-up job and he does not want to answer openly, then something is wrong. I believe in perestroika, glasnost, and open government, whereas the Government do not.
Mr. Jim Sillars (Glasgow, Govan) : On a separate point of order, Mr. Speaker. Are you aware that, while this afternoon's exercise on the Scottish statement was quite useful, it is no substitute for the inquisitorial attitude towards the Government which is required and would come from a Select Committee on Scottish Affairs?
I should like, Mr. Speaker, to take you back a few minutes to the slight altercation between yourself and the
Column 335hon. Member for Tayside, North (Mr. Walker) who complained that he was not receiving enough time to question the Minister. Is it possible, through you, to invite the hon. Member for Tayside, North to reconsider his position in respect of the Select Committee on Scottish Affairs?
Can you explain why, if someone in the House allegedly--I use that word advisedly--disobeys the Standing Orders, he can be evicted from the precincts of the House, yet when a Government refuse to obey Standing Order No. 130 and set up a Select Committee on Scottish Affairs, they can do so with impunity?
Several Hon. Members rose --
Mr. Bill Walker (Tayside, North) : On a point of order, Mr. Speaker. I seek your guidance and, I hope, your protection. May I draw your attention to the fact that the issue of membership of the Select Committee on Scottish Affairs is regularly alluded to in the Chamber?
You will remember, Mr. Speaker, that in two Parliaments the Scottish National party refused categorically to serve on that Committee. Those hon. Members are no longer with us, but the present members of the Scottish National party seek to deny me, as an hon. Member, the rights that they enjoyed. Their reasons for refusing to serve were quite different from mine. I have served in two Parliaments and know something about what happened in that Committee.
Mr. Robert Hughes (Aberdeen, North) : Further to that point of order, Mr. Speaker. Since there is real difficulty in scrutinising Government business adequately, if the Government persist in their refusal to set up a Select Committee on Scottish Affairs, might it be a matter for the Procedure Committee to examine? If we cannot have a Select Committee on Scottish Affairs, perhaps we can have at least double the ration of Question Time.
Mr. Secretary Waddington, supported by the Prime Minister, Mr. Secretary Hurd, Mr. Chancellor of the Exchequer, Mr. Secretary Walker, Mr. Secretary Ridley, Mr. Secretary MacGregor, Mr. Secretary Rifkind, Mr. Secretary Brooke and Mr. David Mellor, presented a Bill to make new provision with respect to the provision and regulation of independent television and sound programme services and of other services provided on television or radio frequencies ; to make provision with respect to the provision and regulation of local delivery services ; to amend in other respects the law relating to broadcasting and the provision of television and sound programme services ; to make new provision relating to the Broadcasting Complaints Commission ; to provide for the establishment and functions of a Broadcasting Standards Council ; to amend the Wireless Telegraphy Acts 1949 to 1967 and the Marine, &c., Broadcasting (Offences) Act 1967 ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed. [Bill 9.]
That the Food Protection (Emergency Prohibitions) (Contamination of Feeding Stuff) (Wales) (No. 4) Order 1989 (S.I., 1989, No. 2269) be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Chapman.]
Property Services Agency and Crown Suppliers Bill
Order for Second Reading read.
This Bill is among the shortest that we shall be introducing this Session ; it is none the less significant. It provides measures to allow the sale to the private sector of the Crown Suppliers and PSA Services, which are both parts of the Property Services Agency. The remainder of the PSA will remain within the Government.
The success of the Government's privatisation programme is acknowledged throughout the world--
Mr. Clive Soley (Hammersmith) indicated dissent.
Mr. Patten : They are not guffawing in Poland, where they have just appointed a privatisation Minister. That is a point to which I shall return with enthusiasm later if invited to do so. Having heard the hon. Member for Copeland (Dr. Cunningham) on Sunday explaining, or perhaps not quite explaining, that the Labour party was or was not enthusiastic about privatisation, we once again look forward to hearing clarification of this issue by the hon. Member for Dagenham (Mr. Gould)--his clarifications on share ownership are like no one else's.
Over the past decade, almost 45 per cent. of what was the public sector in the United Kingdom has been transferred to private ownership. As a result, major public corporations have been given greater freedom and their performance has improved beyond measure. The two organisations with which this Bill is concerned are small in terms of privatisation, but they are of considerable significance in the Government's drive to improve the efficiency of the public sector.
In recent years, there have been major changes in the way in which we manage our public services. At the heart of those changes has been the financial management initiative launched by the Prime Minister in 1981. That initiative took as a key principle the fact that the primary responsibility for ensuring managerial efficiency within Government should lie with the spending departments. No longer would concerns about efficiency and value for money rest primarily in the central Departments, in the Treasury, or, for building matters, in the PSA. Responsibility would instead be devolved to the ultimate users ; in future the customer, not the provider of services, would decide what should be done--the customer would be king.
Although privatisation rightly has a high profile among our policies for the long-term strengthening of the economy, the importance of improving efficiency within Government is no less significant. For example, the PSA
Column 338has been handling expenditure of more than £3.5 billion and employing resources of its own of more than £300 million. The prospect of improving the efficiency with which such a large block of expenditure is managed clearly represents a major prize.
To apply the financial management initiative to building and property services, the Government decided that Departments should assume their own responsibility for all works and estate services which had formerly been provided by the PSA. Departments would themselves manage the money voted for this work by Parliament and would be permitted to choose their supplier of works services from the PSA or elsewhere. In the jargon, Departments would be untied from the PSA. They have been similarly untied from the Crown Suppliers since April 1987.
As a result of these decisions, the service providers in the PSA and the Crown Suppliers have needed to match their professional skills and property experience with a more commercial responsiveness and speed. They know, as the Labour party might put it, that they must meet the challenge and make the change if they are to keep their work load.
The case for these privatisations has three elements
Mr. Tam Dalyell (Linlithgow) : Before the Minister goes any further, will he help us by explaining how valuable public resources such as property and equipment are to be valued, and who will be given the task of valuing them?
Mr. Patten : I am coming shortly to the mechanics of the privatisations, but I assure the hon. Gentleman that when property is involved, a proper valuation will be done before any sale, and it will be made public--
Mr. David Winnick (Walsall, North) : I apologise beforehand for the fact that I am off to the Procedure Committee in a moment. In view of the sweeteners that were given in the Rover case and the strong and justified feeling that corruption was involved, how can we be persuaded that the same degree of corruption will not obtain in future measures of privatisation and of selling off state assets?
Mr. Patten : I reject the hon. Gentleman's allegations. Had I known that he was going to make them and that he was going to leave in a moment-- even for the Procedure Committee--I would not have allowed him to intervene
Mr. D. N. Campbell-Savours (Workington) rose --
Mr. Campbell-Savours : Despite the fact that I am also on the Procedure Committee. However, I regard this debate as important. On the issue of the private versus the public sector, has the Secretary of State been made aware by the Minister of State of what happened two years ago when Richmond house, the DHSS headquarters, was valued? Cluttons, a private sector company, was brought in and charged £44,000 to value the building. It turned out subsequently that an internal memorandum in the PSA had suggested that the same valuation could have been done by its staff for £1,500. Why should the public have to pay an extra £42,500 to use an outside private contractor when the job
Column 339could be done by a civil servant? Does not that take us to the heart of the argument today? In the end, the public may well end up paying far more for the same services.
Mr. Patten : Even though the hon. Gentleman has to leave in a moment, he has such an exemplary record of attending debates that I am always pleased to give way to him. I recall that, in the case to which he has referred, the work done involved a particular expertise because of the buildings concerned. I am convinced that, when a Department is managing its own operations and funds, it will make sure that it secures the best possible value for money. That was certainly my experience when I was responsible for a small Department faced with the obligations under the financial management initiative to look after its property interests.
The hon. Gentleman might also note the difficulty in public sector accountancy practice of ensuring that one is comparing like with like. The most important way in which we can secure best value for money in the public sector is to ensure that the customer is responsible for the budget and has managerial responsibility for what ensues.
I return now to the main elements in the argument for privatisations. First, Departments now have delegated authority to make their own choices about the services that they require. That is the way to ensure effective procurement.
Secondly, the PSA and the Crown Suppliers must compete for their work with others who are equally anxious to provide a good service. Thirdly, the PSA and TCS need the freedom to compete effectively and can get it only outside the confines of the public sector. The House should therefore see that the privatisation of these two bodies arises naturally for the good of the organisations themselves and hence for the good of their staff and customers. It arises out of a simple principle : decisions are best delegated as far as possible to the ultimate users.
Mr. Dalyell rose --
Mr. Dalyell : The Minister used the phrase "for the good of their staff". Why does the National Union of Public Employees object so strongly to the proposals? Where is the evidence for saying that it is for the good of the staff? Does the right hon. Gentleman deny that at least in the view of the staff it is not for their good?
Mr. Patten : I have had the advantage of a meeting with staff unions. I shall come later to the detailed questions about staff because that issue forms an extremely important part of the debate and undoubtedly it will be discussed in Committee. I hope that the hon. Gentleman will have an opportunity to share in the discussions in Committee.
I shall now deal with the two organisations. The Property Services Agency, as it exists at the moment and despite its name, is a large self-contained part of a Government Department--the Department of the Environment. In the past, because it has been both provider and customer for Government works services, it has had many services that are regulatory or essentially
Column 340governmental, such as, for example, the management of the Government's civil accommodation. However, the great bulk of its activities involves the provision of works and estate services to other Government Departments, just as existing commercial agencies-- consultants, estate agents or building contractors--provide similar services for non-governmental bodies.
The PSA has a mixed reputation within Government. It often gets the blame when Government buildings appear badly maintained, although I concede immediately that that can sometimes be the result of its budget having been constrained because of general pressures on public expenditure. In the past, the customer Departments have been free to make the complaints and the PSA was there to receive the brickbats. In future the decisions about what to spend--the point that I made earlier--will lie with the customer departments. If they decide to spend less on maintenance or more on a new building, it will be their own choice. The PSA will be judged on how well it has provided what the customer asked for. That will be good for efficiency in Government and salutory for Departments and the PSA.
In the past, the system of parliamentary scrutiny of public expenditure through the National Audit Office and the Public Accounts Committee and the studies by the Select Committee on the Environment have ensured that any aspects of the PSA's performance which deserved criticism have received wide public coverage. That is wholly reasonable while the PSA remains a Government department. However, we should not allow that proper degree of public exposure to obscure the less well publicised, but regular, stream of work that the agency does so well.
It receives a large number of awards each year for design excellence--there were 22 last year alone--and it is held in high regard by some of its largest and most demanding customers and by many of its potential competitors in the private sector. My right hon. and learned Friend the Lord Chancellor has recently paid tribute to the PSA for its work in the extensive countrywide programme of court building. The United States forces have compared the service that they get from PSA favourably with the service they get at bases anywhere in the world. In 1988-89 the PSA won 11 of the total of 21 awards made by the USAF European Command.