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Column 1022

Summerson, Hugo

Taylor, Ian (Esher)

Taylor, John M (Solihull)

Temple-Morris, Peter

Thompson, D. (Calder Valley)

Thompson, Patrick (Norwich N)

Thorne, Neil

Thurnham, Peter

Waller, Gary

Ward, John

Wardle, Charles (Bexhill)

Watts, John

Wells, Bowen

Wheeler, Sir John

Widdecombe, Ann

Winterton, Mrs Ann

Wood, Timothy

Yeo, Tim

Young, Sir George (Acton)

Younger, Rt Hon George

Tellers for the Noes :

Mr. Stephen Dorrell and

Mr. David Lightbown.

Question accordingly negatived.

New clause 5

Establishment of trading funds :necessary conditions

.--(1) No order establishing a trading fund shall be made until the responsible Minister has published--

(a) details of the performance indicators against which he intends the record of the trading fund in terms of quality of service to be measured and judged ; and

(b) clear guidelines as to what information the accounts and reports of the trading fund will have to include.'.-- [Mr. Beith.] Brought up, and read the First time .

Mr. Beith : I beg to move, That the clause be read a Second time.

The new clause requires that no trading fund shall be established until the Minister responsible has published details of the performance indicators against which he intends the record of the trading fund to be judged, and clear guidelines as to the information that the fund's reports and accounts must include.

It is generally agreed that proper performance indicators must be set for trading funds. That was stressed by the report of the Public Accounts Committee, which stated :

"We consider it important that departments and Agencies aim to be fully aware of the types, levels and standards of service their customers are looking for."

The Committee insisted that agencies should ascertain their customers' views, as should Departments before they became agencies. The report added, in paragraph (xii) :

"we consider it necessary that Agencies should be required to demonstrate the relative success with which their activities are carried out "

It is equally important that the performance indicators are known in advance, otherwise the danger is that a trading fund will be established that has as its explicit objective the provision of a service more cheaply without regard to the quality of that service or to the interests of the community as a whole.

I stress both considerations, because many of the activities undertaken in the public service by organisations that might be turned into trading funds relate to the granting of a licence or permission to an individual that has important indications for the community. Such licences or permissions can be provided much more cheaply if the public service does not examine carefully whether an individual is a fit person to hold a particular licence, a vehicle is fit to be licensed, or a passport granted--which, in the absence of adequate security, might be issued against forged documents. In many areas, there is public interest in the job being done extremely thoroughly and carefully. There is also public interest in ensuring that the individual customer enjoys a quick response. To achieve both is frequently

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expensive. If performance indicators do not allow for that, there will be serious repercussions for the individuals and for the community as a whole.

Another powerful argument for knowing the performance indicators is that so many of the services involved have no competition. The benefits of a trading fund and of running part of the public service on a more commercial basis may include greater efficiency, more self-reliance, and greater autonomy for the individual civil servant. Many advantages could flow from people providing a service on an efficient basis that they have organised rather than having to conform to a centralised model.

One of the main gains to be derived from a commercial style of operation will arise only if there is competition. In many cases, that will be impossible. The list included in next steps includes the vehicle inspectorate, Companies house, HMSO, and the weights and measures laboratory. It is inconceivable that they could face any competition. There could not really be two organisations producing rival copies of Acts of Parliament to see which was cheaper. However, I am bound to say that they are now so expensive that someone should be able to produce them more cheaply. The other day I was reminded by the Clerk of the House that the daily part of Hansard , which now costs £5, cost only sixpence when he entered the service of the House. That is a pretty staggering rate of inflation, even for the Governments of both parties that have been in power over that period.

In a great many of the services listed, it is impossible to imagine competition--the Department of the Registers of Scotland, the Driving and Vehicle Licensing Directorate, the Driving Standards Agency, the Employment Service, the Passport Office, the Patent Office, and the radio communication division in the Department of Trade and Industry which gives approval for the use of certain kinds of radio equipment which might interfere with the network. In none of those services can there be a competitor. Therefore, it is open to the agency to charge what it likes and to provide indifferent service.

One reason for considering the trading fund approach has been the experience in many parts of the public service that the lack of the spur of competition makes it likely that inefficiency will persist. I have been a strong critic of the passport offices on that account. We are talking about areas of work in which there cannot, by definition, be competition. That makes them particularly inappropriate for privatisation. It also makes it all the more important that we have clear performance indicators which are discussed in advance so that we know that they will be concerned not solely with cutting the cost of the service, but also with the level of service the customer can expect--for example, how quickly he can get his passport.

The performance indicators should be concerned with the general public interest and should ensure that, where regulation, public protection or security are involved, they are attended to thoroughly and carefully. No agency should be created unless we know in advance what the criteria are. That is one aspect of the new clause. The other aspect is that we should know what will be in the published accounts of the agency, and what an agency will be required to make available by way of information to the public. In Committee I questioned the Minister about what appeared to be a hole in the legislation which

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seemed to give the Treasury the ability to tell a trading fund that it did not need to publish accounts or to direct it, indeed, not to publish accounts. As the question was difficult to answer at the time, the Minister has since written to me, setting out why he believes that it would not be necessary to amend the Bill in this respect. I am grateful to him.

Having studied the matter carefully, the Minister asserts that, because section 4(6) of the Government Trading Funds Act 1973 is not being repealed, all trading funds will be required to prepare statements of account and lay them before Parliament. He says that that obligation has not disappeared. What he was concerned about in the part of the Bill to which I referred in Committee was the timing of other forms of account which the Treasury may require agencies to provide. That is all well and good, but I still think that we should know at the point when an agency is set up whether the information which the public and Parliament will get about it will be adequate to measure its performance.

Those seem to be reasonable objectives to which the Minister should agree. I see no reason why they should not be incorporated in the Bill.

Mr. Lilley : I welcome the emphasis that the hon. Member for Berwick -upon-Tweed (Mr. Beith) has placed on the importance of quality of service to the customer. I have great sympathy with that aspect of the new clause that could be regarded as an attempt to put into statute the Government's intentions. I assure the hon. Gentleman that our general intention is that all agencies will be set performance targets, including quality of service targets. In general, I hope that it will be possible to give some indication of what the targets will be when the order establishing a trading fund is debated, but it may not always be possible to provide full details, as the new clause would require, because there will inevitably be a time lag between publishing the order establishing the trading fund and the date on which the fund comes into being.

We also think it important to encourage the development of better measures of output and performance over a period. I therefore do not think that it would be appropriate to limit such measures in every case to those that were published before the publication of the order establishing the trading fund.

The second part of the amendment would require the responsible Minister to issue clear guidelines as to what information the accounts and report will include. The hon. Member may not be aware that in December the Treasury published guidance on the coverage of trading funds accounts in a bookled entitled "Trading Accounts : A Guide for Government Departments and Non- Departmental Public Bodies". I can recommend it to hon. Members as a delightful read if they ever suffer from insomnia. Copies have been placed in the Library. We envisage that proper guidelines and quality standards will be set for each trading fund. We shall want details of how they have performed. We shall also want to compare targets and previous performance.

It being Ten o'clock, the debate stood adjourned.

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BUSINESS OF THE HOUSE

Ordered,

That, at this day's sitting, the Government Trading Bill, the Ways and Means Motions relating to the Enterprise and New Towns (Scotland) Bill and the Social Security Bill may be proceeded with, though opposed, until any hour.-- [Mr. Sackville.]

Government Trading Bill

As amended (in the Standing Committee), again considered. Question again proposed, That the clause be read a Second time.

Mr. Lilley : It would be inappropriate to enshrine such a provision in rigid statutory form, as the new clause attempts to do. However, I sympathise with the spirit that underlies it.

Question put and negatived.

New clause 6

Civil Service Commissioner

Within one year of the coming into effect of this Act, the Treasury shall lay before Parliament proposals for the establishment of a Civil Service Commissioner (Ombudsman) who shall have power to set minimum standards of service for Civil Service agencies providing a service to the public and financed by means of a trading fund, and to look into, and recommend appropriate remedies and compensation for, complaints made by members of the public with regard to the operation of any such government agency or trading fund.'.-- [Dr. Marek.]

Brought up, and read the First time.

Dr. Marek : I beg to move, That the clause be read a Second time. New clause 6 is related to new clause 5, but goes a little further. It would give the public a little more confidence in the quality standards that are to be set by agencies and trading funds. It provides for an ombudsman who would have control over quality standards. It would not be left just to the Government.

The Government and the Civil Service have not done much work on establishing how agencies could measure the quality of services provided. Certainly very little work has been done on providing the mechanisms for consumer or staff input into quality control. Mr. Peter Kemp, the "next steps" projects manager, gave evidence to the Public Accounts Committee which is recorded in the Committee's 38th report, published in October 1989. He said :

"The word customer' is a very dangerous and difficult word to use in the context of public service."

That leads me to believe that those who are organising agencies and Government trading funds do not like the word "customer" and therefore do not use it. They are more concerned with administration and saving public money.

A better quotation is again to be found in the Public Accounts Committee's October 1989 report. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) asked :

"How do they know what the taxpayers and customers who use the DSS want and think of their present service?"

The matter under discussion was the introduction of agency status for the Department of Social Security. My hon. Friend said :

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"If you do not know it how can you set up an agency system designed to meet their requirements efficiently and effectively? I am asking what specific plans you have to consult them."

Mr. Kemp replied :

"I do not know what specific plans the DSS have, nor am I quite sure how the DSS would set out specifically consulting claimants or claimants' representatives."

That is the problem. Therefore, we have tabled the new clauses. The work has not been done. The introduction of trading agencies and trading funds has more to do with the Government's wish to save public money and to improve administration. They want to introduce even more commercialisation, with a view to eventual privatisation. It is possible to consider the consumer and staff input. To make a constituency point, Wrexham has a DSS consumer committee. I wonder how many DSS consumer committees there are up and down the country. That is one way of getting more consumer input into quality control. The DSS office in Wrexham works very well, but that is certainly not always the case in other parts of the country.

I shall quote two documents about civil servants, their contact with journalists and their use of official information. My first quote has some lessons for Government trading funds. The new draft code of conduct was published following the Official Secrets Act 1989. Paragraph 9904 states :

"Civil servants must exercise care in handling the information that has come into their possession in the course of their official duties and should not forget that they are employed for the purposes of the Department in which they are now serving. They owe duties of confidentiality and loyal service to the Crown. Since

constitutionally the Crown acts on the advice of Ministers who are answerable for their Departments in Parliament, these duties are for all practical purposes only to the Government of the day." Of course there is no question of looking after any concerns of the consumer or the public-- some people might say, quite rightly--but the Government exist for the benefit of the public and the consumer and it should be absolutely clear what rights consumers have and what quality standards Ministers set for their civil servants in various Departments so that they can perform their services for the benefit of the public.

If the ethos behind the new draft of the code of conduct were enlarged, quality standards would not be made available for the public. Something would be said so that the public thought that there were quality standards, but they would not have full access to information about exactly what they meant, how they operated and what redress the public would have in any instance where they thought that the standard of quality fell short.

I shall also quote a document dated November 1989 which has been circulated quite widely in the Civil Service. It is from the office of the Minister for the Civil Service and is entitled, "Relations with Journalists". Paragraph 11 states :

"In cases of doubt or disagreement, the final approval for appearances in these as in other current affairs programmes rests with the Prime Minister,"--

the Prime Minister's heavy hand is appearing again--

"who will wish to take account of recommendations by Ministerial colleagues and, as Minister for the Civil Service, of any views put forward by the Head of the Home Civil Service, as to the propriety of participation by civil servants. The main considerations will be whether the final result is likely to be of value to the Government, the Civil Service and to the Department concerned."

It says nothing about whether it will be of any value to the public or whether quality standards will be maintained.

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I know that the document deals with relations with journalists, but it is pertinent to say that that paragraph says nothing about objectivity, truth or benefit to the public. It simply says that the final result is likely to be of value to the Government ; whether it is right or wrong or whether it is meritorious is not mentioned. It is concerned only with

"the Civil Service and the Department concerned ; whether Ministers and civil servants can be seen to be behaving naturally, or forced in a play- acting situation by fly on the wall' techniques ; and whether the discussions can be recorded without damage to the relationship between Ministers and civil servants. Any submission to No. 10 should deal specifically with these points."

If the relations that the Government have or would like civil servants to have with the media and the press and their code of conduct are anything to go by I do not have much confidence in what the Government say about quality standards to the public, being understood by the public and having the general confidence of the public.

I tabled a written question about the passport office and how it would improve its quality standards. I was told in reply : "The passport department will be aiming in 1990 to process all straightforward, non- urgent passport applications within a maximum of 30 working days during the peak period between January and June, and within 20 working days at other times. Urgent cases will receive priority and should not normally be subject to delay".--[ Official Report, 25 January 1990 ; Vol. 165, c. 882. ]

I am confused about what

"should not normally be subject to delay"

means when the first part of the answer refers to 20 days and the latter to 30 days. It is not good enough to have passport offices with quality standards of 20 days for half of the year and 30 days for the other half. That is not good enough and the public will not put up with it. The Government must do better. The new clause seeks to do something about it, and it would be a step in the right direction.

The Opposition are the party of the consumer. The Conservatives are for bureaucracy and administration and it is time they realised that if they are to do better--and they must do better if they are to come within sight of the Labour party at the next general election--they should consider the consumer more.

Mr. Lilley : I can appreciate the hon. Member for Wrexham (Dr. Marek) showing interest in, and having views about, the draft code of conduct, but it concerns only relationships between the Crown as employer and civil servants as employees of the Crown, so it is not strictly relevant to quality of service. Nor is it distinctly related to agencies and trading funds.

I have some sympathy for the intentions of the new clause. Next steps agencies fall within the jurisdiction of the Parliamentary Commissioner for Administration, the ombudsman, and he can investigate complaints of maladministration made against them. The ombudsman proposed by the amendment would unnecessarily duplicate the existing investigative powers of the parliamentary commissioner. The new clause also proposes that the ombudsman should have statutory powers to set minimum standards. That would clearly conflict with the exercise of ministerial responsibility and accountability to Parliament. The Minister in charge of a Department is responsible for

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setting standards for quality of service. That remains just as true in the context of agencies. He may be called to account by Parliament for his decisions.

It would, at the least, cause confusion to superimpose on those established and well-understood arrangements a separate statutory authority for an ombudsman to set standards. I therefore cannot advise the House to accept the new clause.

Mr. Bill Michie : I listened to the Minister carefully, having listened even more carefully to my hon. Friend the Member for Wrexham (Dr. Marek). It seems strange that the Government should feel that there is no need to protect public interests by means of an ombudsman to whom people can bring complaints and queries.

I recall long debates on social security legislation involving the establishment of new regulations by which people would get money from the DSS. The system of appeal was changed. My hon. Friends and I complained that instead of having the normal independent tribunal, the Government were removing from the public their ordinary rights should they feel aggrieved about their treatment by Government Departments or other organs of the establishment.

In that case, the Government of the day took away the right of appeal to an independent tribunal and announced that should there be anomalies or complaints, complainants should appeal to an officer in the department concerned. If, after that officer had made his judgment--saying, perhaps, " I am sorry, but you are not entitled to a grant"--the person still felt aggrieved, he or she could appeal to the next senior officer. As we pointed out at the time, the junior officer concerned would be in the same department as the senior officer and would, of course, take instructions from his superior. In that case there was no genuine appeals system. Although we pointed that out, the Government were not prepared to listen to our pleas. We are anxious to have in position a genuine ombudsman so that if a person feels that he or she has not had a fair deal from, say, a DSS office, application can be made to the ombudsman. It seems that the existing ombudsman is not all that busy, due, no doubt, to the existing mechanism for appeal. The Government say that we do not need an ombudsman and that the work can be done through the Secretary of State, yet they have set up an ombudsman mechanism that is additional to the Secretary of State to deal with social security benefits. Goodness knows, the Secretary of State has enough power already. An anomaly exists. For some strange reason, the Government are afraid of having someone who is independent of the Government and Departments and who can protect the interests of ordinary people who come across misdeeds or misunderstandings in Departments. I hope that, even at this late hour, the Minister will reconsider and at least be consistent with Government philosophy in the past.

10.15 pm

Dr. Marek : The Financial Secretary's reply was unconvincing. We must stand up for the consumer, who has a vital interest in these matters. The new clause goes some way towards securing that interest, and I ask my right hon. and hon. Friends to join me in the Division Lobby.

Question put, That the clause be read a Second time :

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The House divided : Ayes 50, Noes 133.

Division No. 95] [10-15 pm

AYES

Barnes, Harry (Derbyshire NE)

Battle, John

Beith, A. J.

Boateng, Paul

Bruce, Malcolm (Gordon)

Campbell, Menzies (Fife NE)

Campbell-Savours, D. N.

Clay, Bob

Clelland, David

Cryer, Bob

Dalyell, Tam

Davis, Terry (B'ham Hodge H'l)

Dewar, Donald

Dixon, Don

Duffy, A. E. P.

Eadie, Alexander

Evans, John (St Helens N)

Flynn, Paul

Forsythe, Clifford (Antrim S)

Foster, Derek

Fyfe, Maria

Golding, Mrs Llin

Griffiths, Win (Bridgend)

Howarth, George (Knowsley N)

Howells, Geraint

Hughes, John (Coventry NE)

Jones, Martyn (Clwyd S W)

McAvoy, Thomas

McWilliam, John

Mahon, Mrs Alice

Marek, Dr John

Meale, Alan

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Nellist, Dave

Orme, Rt Hon Stanley

Patchett, Terry

Pike, Peter L.

Powell, Ray (Ogmore)

Primarolo, Dawn

Robertson, George

Ross, William (Londonderry E)

Sheldon, Rt Hon Robert

Skinner, Dennis

Steel, Rt Hon Sir David

Taylor, Matthew (Truro)

Wareing, Robert N.

Welsh, Michael (Doncaster N)

Wise, Mrs Audrey

Worthington, Tony

Tellers for the Ayes :

Mr. Jimmy Dunnachie and

Mr. Allen McKay.

NOES

Alexander, Richard

Alison, Rt Hon Michael

Amess, David

Arbuthnot, James

Ashby, David

Baker, Nicholas (Dorset N)

Batiste, Spencer

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Benyon, W.

Blaker, Rt Hon Sir Peter

Boswell, Tim

Bottomley, Peter

Brazier, Julian

Brooke, Rt Hon Peter

Browne, John (Winchester)

Buck, Sir Antony

Burns, Simon

Burt, Alistair

Butler, Chris

Butterfill, John

Carlisle, John, (Luton N)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Chapman, Sydney

Chope, Christopher

Churchill, Mr

Davies, Q. (Stamf'd & Spald'g)

Day, Stephen

Devlin, Tim

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Dunn, Bob

Fallon, Michael

Favell, Tony

Forman, Nigel

Forth, Eric

Franks, Cecil

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