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Dr. Marek : 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

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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.

Mr. Dalyell : 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.

Dr. Marek : 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.

Mr. Kenneth Hind (Lancashire, West) : Does the hon. Gentleman accept that the searches to which he refers involve contraband, drugs and so forth, none of which can

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be used to contribute to the trading fund? Perhaps the hon. Gentleman's example is a little wild in the context of the Bill.

Dr. Marek : 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.

Mr. Norman Lamont : 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"?

Dr. Marek : 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

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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.

Mr. Hind : This argument equally applies to civil servants at present.

Dr. Marek : 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

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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.

Mr. Edward Leigh (Gainsborough and Horncastle) : All good things.

Dr. Marek : 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--

Mr. Deputy Speaker (Mr. Harold Walker) : Order. The hon. Gentleman is straying wide of the terms of the Bill.

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

If a civil servant improperly authorises the release of letters--

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Mr. Dalyell : 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?

Dr. Marek : 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--

Mr. Deputy Speaker : Order. It is difficult to relate the hon. Gentleman's remarks to the Bill.

Dr. Marek : 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.

Mr. A. J. Beith (Berwick-upon-Tweed) : 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?

Dr. Marek : 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

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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 be 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.

Mr. Norman Lamont : We have done so.

Dr. Marek : 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

Mr. Edward Leigh (Gainsborough and Horncastle) : 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

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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, are 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

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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.

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6.9 pm

Mr. A. J. Beith (Berwick-upon-Tweed) : 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

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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.

Dr. Marek : 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.

Mr. Beith : 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.

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6.17 pm

Mr. James Paice (Cambridgeshire, South-East) : 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

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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

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