House of Commons Hansard Debates for 26 Nov 1992

Ms. Mowlam : It would be helpful if the Minister did not continue to quote selectively from documents. The conference of the IPPR/TUC to which he referred acknowledged that there were some pluses for examining efficiency through market testing. However, it did not follow the Minister's logic on the concept of contracting out as one option and privatisation as another. Equally, many local authorities, including Mr. Jeremy Beecham from Newcastle--whom the Minister seems to quote all the time--voluntarily acknowledged the value of competitive tendering before the Government put the other C in front to make it compulsory.

Mr. Waldegrave : That is no more or less than what I was saying. I was not claiming support for privatisation ; I had departed from that part of my speech. I was claiming support for the process of competitive tendering, which, as the hon. Lady confirmed, is widespread among some local authorities--although, I must say, not all.

Let me deal with some of the concerns which I may be able to put to rest. Although the White Paper sets clear targets for the amount of Government activity which is to be contracted out, it would be meaningless to set such targets because we have no preconceived view of whether any particular function can be more cost-effectively provided in-house or on a contracted- out basis. The result in each case will depend on the outcome of the competitive tendering process. So there is no hidden agenda. The House well knows that, when we believe it is right to privatise, we do so. We have no need for hidden agendas. Market testing is first and foremost a management reform within the continuing public sector.

Let there be no doubt that what we are talking about here is the explanation of functions to see whether they can be carried out more cost- effectively in partnership with the

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private sector. Those functions are, by implication, activities which are considered to be essential. They will still be carried out--and carried out better than before this exercise. The work and the jobs needed to do it will continue to exist. Even when the market testing of an activity results in a contract being placed with the private sector, Government employees may be redeployed or taken on by the new contractor. That has happened in the vast majority of cases over the last four years.

In addition, let me make it clear that Departments which achieve savings through market testing and contracting out will be able to apply those savings for the benefit of their programmes. This policy was set out in the "Competing for Quality" White Paper which launched market testing in the civil service last year. It has not changed. There will, of course, still be very substantial areas of activity which, after review, it is agreed should be left in the public sector and still be carried out by the public sector. We aim to improve management standards by looking for other ways of exerting an equivalent discipline to that of competition. Indeed, it is essential that we do so, since, when there is no choice, the supplier has a greater, not a lesser, responsibility to the customer.

Much is being done to promote better management in these areas. We are getting decent financial management systems in public services. We have now established in most public services proper

purchaser/provider relationships as the basis for their operations. We have freed managers to use their delegated budgetary powers to buy services wherever they can find the best deal for their customers. The creation of executive agencies has had a dramatic effect on Civil Service management. The agencies are run by chief executives who are usually appointed by open competition, ensuring we have the best person for the job from inside or outside the civil service. All agencies have published framework documents setting out key objectives, responsibilities and targets, set annually by Ministers and monitored by them. They have published annual reports and accounts and, in many cases, corporate and business plans. About half of all civil servants now work in executive operations run on those lines. By 1995, that number could be as high as three quarters. That means that, within a few years, the civil service is likely to consist of a relatively small policy-making core, and a series of devolved delivery organisations. Some of them will, by themselves, be as large as or larger than the core and will be expected to focus increasingly on their customers.

The citizens charter White Paper shows that agencies are indeed delivering a better service to their customers. Services are now being delivered quicker : for example, the Driving Standards Agency has reduced waiting times for a driving test to just over five weeks as against 13 weeks in 1988, and the average time for issue of a passport by the United Kingdom Passport Agency has come down from 3.5 weeks in 1988 to seven days. Agencies are carrying out research to find out what their customers want and agencies like Companies House and the Public Record Office have introduced longer opening hours in response to public demand. All agencies now publish full information on their activities and the way that taxpayers' money is being used in their annual reports and accounts.

Next week I shall be publishing the third annual review of the next steps programme, which will give detailed information on all the agencies set up so far and other

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organisations established on a next steps basis, together with information about future candidates and an overview of the effectiveness of the programme as a whole. This so-called next steps structure opens up the opportunity for delegation of managerial responsibility and accountability to a degree that had previously been impossible. The central Departments will be the more able to help agencies take advantage of this opportunity under the enabling provisions of the Civil Service (Management Functions) Bill which has just finished its Committee stage.

Of course, the operations of the delivery organisations--the executive agencies--may in time suggest further scope for change and improvement. I am concerned to establish an adequate balance between stability and the need to take advantage of further developments. Once an agency has been set up, the question whether privatisation has become a serious possibility should be considered during the review of the framework document--usually after three years of operation. If privatisation has become a serious possibility, it should be investigated fully. If agency status is confirmed once the review is completed, people will have reasonable security from further upheavals ahead of them.

Thus, we are setting in place throughout the public service a clear structure of management by service agreement, with Departments purchasing from private or public sector, the services that the public need against charter principles and charter targets. That that is the right way forward is again not just a view from the right. The former general secretary of the Fabian Society, who writes in the current edition of the Fabian Review argues :

"the model developed in the NHS reforms of splitting the function of purchasers from that of provider should be applied throughout the public services".

That is my objective too.

Finally, the citizens charter underpins and links all the different initiatives that I have described.

Mr. Frank Field (Birkenhead) : The Chancellor of the Duchy of Lancaster says that he is reaching the end of his speech, and I must express some disappointment about one subject that he has missed. He began in good style, reminding us of the events of the winter of discontent. It is crucial for Opposition Members--as it is for Conservative Members--to say that such behaviour is totally unacceptable and that we have no intention of allowing such developments again. Without doing so, we stand little chance of success. The right hon. Gentleman also made much of the importance of the customer in services and that is right because it is proper in principle and because there are a lot of votes in it--we should not think that that means that it is a wrong principle.

During the past 14 years, the Government's attitude to people who work in the public sector has changed. Many such workers, including my constituents, feel that, rather than first-class, they have been made third or fourth-class citizens. The right hon. Gentleman is far too civilised to make statements similar to those that his colleagues have made about people who deliver services. Does he care to comment on how he values public sector workers, and on the fact that in any discussion of improvements in the delivery of services--which is crucial--a secondary but important matter is how we treat and pay our staff ?

I listened to the Chancellor, but when he talked about improving services he never mentioned what he will do about some of the appallingly low wages in the public

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sector. As part of the process of more open government, will he tell us how many public sector workers still earn wages which qualify them for family credit?

Mr. Waldegrave : I shall write to the hon. Gentleman with the factual answer to his last question.

In the earlier part of my speech I paid tribute--perhaps too briefly--to workers in the public sector. It is difficult to do so without it sounding like a cliche , but my tribute was real and the hon. Gentleman's point is well taken. I tried to argue that case with the hon. Member for Workington (Mr. Campbell-Savours). It is just as foolish to say that all private sector workers are bad as it is to say that all public sector workers are bad. If some Conservative Members hold the latter view, they are mistaken-- just as the few Opposition Members who held the opposite view, and who persecuted the hon. Member for Birkenhead (Mr. Field) in his constituency, are wrong.

The citizens charter programme gives the Conservative party and the Government the opportunity to reaffirm their commitment to the need for long-term public services. I was happy to join the hon. Member for Redcar to make that commitment yesterday, and to pay tribute to those who work in the service. I do not believe that that relieves us--the public sector-- from the relentless pursuit of efficiency in the interests of the services that we provide. I know that the hon. Member for Birkenhead would not think that it did. Therefore, I respond warmly to his invitation to pay tribute again to public sector workers. They are not third or fourth-class citizens, and they are both providers and consumers of the services that we are trying to improve.

The principles of the charter--standards, information and openness, choice and consultation, courtesy and helpfulness, redress for mistakes, and value for money--are especially important in those areas of Government which are not subject to ordinary competitive pressures. The more we devolve management responsibility, the more explicit we must make the public service principles and ethos that we want to run through all those devolved organisations.

Hon. Members will find, both in the first report on the charter, and in the many individual published charters, innumerable specific examples of how those principles are being implemented. The more we establish throughout the public service the new structure of management by clear service agreement--whether contract, framework agreement or internal service-level agreement--the more powerful the mechanism becomes for delivering those charter standards and ensuring better public service provision.

I hope that I have made clear to the House the nature and scale of the changes and improvements that the Government have, and are continuing to introduce into the public service. I also hope that Opposition Members will be able to move beyond their sterile belief that, if only some huge but usually unspecified increase in resources could be made available and given to existing provider organisations, all would be well. Poor services do not come free or cheap either, as was discovered in the 1960s and 1970s. For any given level of resources, it is always possible to provide better services, which are more cost-effective and more responsive to the needs of the citizen and customer. It is the Government's constant and fundamental aim to ensure that that happens.

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6.27 pm

Ms. Marjorie Mowlam (Redcar) : I welcome the debate. It would be churlish of me not to do so, since I asked for it and the Minister granted it so quickly. He would have been disingenuous if he had not known when he granted it that the Government were going to publish the citizens charter White Paper the day before, so it allows time for another four or six hours of debate on the matter in the House. I am pleased that, in answer to my hon. Friend the Member for Birkenhead (Mr. Field), the Chancellor of the Duchy of Lancaster acknowledged his support for public sector workers. Charming though he may be at times, his colleagues are not charming to the public sector, which causes great concern to the many people who work in it. I am sad that he could not express such charitable views on local authorities. The right hon. Gentleman said that he found the work that York he had been doing interesting. It would have done him no harm to say that York and many other local authorities did a good job on charters in response to quality services before he or the Prime Minister dreamed of nicking our idea. That would have been a positive step.

As the right hon. Gentleman keeps trying to cosy up in this debate and to say how often the two sides of the House agree, it would be useful to put on record briefly the aspects of public services management about which we agree, or do not agree. First, both sides agree about the need for quality public services. Another point we have in common is that the Opposition also believe that a citizens charter is one mechanism to improve the quality of public sector services--we wrote about the concept before the Conservatives had even thought about it, and many local authorities implemented it before then.

We differ drastically with the Government about the mechanisms by which quality services are achieved. We believe that they are best achieved at the local level, with local accountability and with people being held accountable for the services that are offered by the local authoritiy or other local body.

The Government take the opposite position. They believe that quality services are achieved--the Minister said it more clearly than I have ever heard it said--by direct privatisation, by market testing as a precursor to considering an outside bid. That involves contracting out of the national civil service or the next steps executive agencies. Although the latter are at present operating at arm's length, in terms of their framework document, they could be privatised in the future.

Mr. Gyles Brandreth (City of Chester) : Is the hon. Lady saying that she is totally opposed to market testing now and for all time, even if it is shown that savings of perhaps 25 per cent. could be achieved by using market testing? Those savings could be re-employed to improve the quality of the services.

Ms. Mowlam : I have no objection to the use of indicators of a quantitative and qualitative nature to test the services of a Government Department or local authority.

Mr. Brandreth : Oh?

Ms. Mowlam : The hon. Gentleman expresses surprise. Local authorities have been doing that for ages. They may not have put the same label as the Government on the

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activity, but many efficient local authorities and other bodies have been doing it. So I agree with increased efficiency and the use of internal mechanisms to achieve it, and we can discuss many of them.

I disagree with the way in which the Government are hiding behind market testing and, instead of saying, "We are putting this out to competitive tender," are avoiding using that language. Had the Minister made the position clear and said that the Government were putting this or that out to competitive tender, large sections of the national civil service would have been aware of precisely what the Government were doing. People get a totally different view when the Minister says, "We shall do market tests and look at external contracts and so on," and dresses the whole thing up in language of that type.

Mr. Waldegrave : I said that market testing was the precursor, should outside bids be better, to contracting out. I am not sure that the hon. Lady answered my hon. Friend the Member for the City of Chester (Mr. Brandreth). Is she in favour of market testing as a mechanism?

Ms. Mowlam : I have no difficulty in looking for quality and efficiency of service using quantitative and qualitative indicators. I am not satisfied when market testing is put in the context used by the right hon. Gentleman today, which is in preparation for competitive tendering-- [Interruption.] Does the right hon. Gentleman find my remarks confusing? What is his problem?

The right hon. Gentleman described the competitive tendering which the Government are intent on implementing as taking place on a level playing field, and I hoped from what he said that he intended to describe the nature of the playing field, but he did not do that. I shall show how the playing field is far from level, which causes much of the problem. The Minister puts on a facade of citizens charter quality services, but beneath that lies his desire for a very different national civil service.

The Parliamentary Secretary, Office of Public Service and Science (Mr. Robert Jackson) : The hon. Lady is discussing an important and interesting point and I am unclear about precisely what she is saying about her attitude and that of the Opposition to market testing. She said that she was in favour of market testing, except in the context of competitive tendering. Is she aware that market testing and competitive tendering are absolutely integrally related? I hope that she will clarify the point. We shall make considerable progress if she does.

Ms. Mowlam : Let us stay with the point until it is resolved.

Mr. Frank Field : What is my hon. Friend against?

Ms. Mowlam : I shall tell my hon. Friend what I am against. We are against compulsory competitive tendering if it represents the privatisation of our national civil service. Once that has been privatised and there is trouble with contracts that have been put out to competitive tender, there will be nothing left of the civil service to which to complain. If those responsible make some of the mistakes that local authorities have made, where shall we go from there? There will not be a national civil service to deliver what the citizens have a right to demand.

It is important to appreciate precisely what I am saying, because many Opposition Members have experience of

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local government and know what delivering quality service is about. We believe in having the ability to measure efficient quality so that, for example, cost centres in local government can be compared. We can thereby reveal efficient ways to improve a service.

In that context, it is still a public service and it is accountable to the citizen. The service has not been contracted out or privatised, at which stage it is not accountable to anybody but is run by private companies which are driven by the profit motive and which believe in short-termism. Their activities are certainly not based on the long-term interests of the people.

Mr. Davidson : Does my hon. Friend agree that market testing is being used by the Government artificially to divide the various functions of Government--for example, by taking the clerical services out of a general activity and creating sub-units which are tendered in a disruptive manner and in such a way that the various sections are not able to come together to provide a unified whole and a better service? That is market testing designed to disrupt and destroy a service rather than enabling like with like to be compared on an external basis.

Ms. Mowlam : I thank my hon. Friend for that intervention, which helps to show why the national civil service and local authorities, as they have functioned in the past, are important.

Mr. Robert Jackson : It becomes clear that the hon. Lady is in favour of market testing on the basis that no contract is awarded to any outside bidder.

Ms. Mowlam : We have discussed matters of this type time and again. We want a national civil service that is part of the nation's heritage. We want it to be efficient and to deliver what the people need-- [Interruption.] The Chancellor of the Duchy seems to find that amusing. What we are debating is crucial to the future of our nation. We must have a civil service that delivers to the people the quality services to which they are entitled.

We accept the need for increased efficiency. That involves having indicators and testing, nationally or decentralised, to achieve the delivery of quality services. But it is clear from the Minister's remarks that the Government do not believe in a national civil service. They want it divided up into next steps agencies, privatised or, in some limited cases, remaining with Government. That would give us a totally different animal from what we want for the future. We accept that it may be necessary for a Department to contract out the odd service. I have explained that local authorities have been doing that for years. A small rural local authority will contract out, say, its legal system because it is more cost- effective. The Government have not given a democratic choice for people to achieve that type of accountability at the local level. Their plan is compulsory, even though the Minister talks about the way in which it would be a good idea to decentralise certain matters. He says that national Government should not dictate. What is compulsory competitive tendering?

It is not as though the right hon. Gentleman is allowing local authorities the right to decide what services to run and how to run them. Local authorities have elections to make them accountable. Instead of having the ability to

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choose, they are being told that compulsory competitive tendering must be the way forward. That is the degree of centralised control that the Minister is imposing on them.

I hope I have explained the view of the Opposition to the satisfaction of Conservative Members. There are certain crucial differences between the two sides of the House. We believe in local accountability, while Conservative Members do not. We believe in quality services and that they cannot be achieved simply by privatisation. I will give some examples to show why privatisation is not the answer.

As I listened to the Chancellor of the Duchy, I presumed that he had again been reading the book from which he often quotes, "Reinventing Government" by Gaebler and Osborne. The Library copy has gone missing, so it is difficult for me to check whether the structure of what the right hon. Gentleman is proposing is in conformity with that publication. If he has it, we would welcome its return to the Library.

My hon. Friends and I have a commitment to the public sector which the Government do not have. The right hon. Gentleman said at the conclusion of his remarks that he agreed that the public sector was important. If he believes in the future of the public sector, I should appreciate it if he and the Financial Secretary would distance themselves from the Treasury and say that they disagree with the Treasury document issued in 1991 called "Selling Services into Wider Markets". That document states :

"The Government's policy is to restrict the size of the public sector and in general the presumption is that services should wherever possible be provided by the private sector rather than the public sector This presumption applies in particular where a public body would be competing with the private sector".

I presume that when the Minister says, as he did today and yesterday, that he wants to continue with the public sector, he disagrees with the Treasury.

Mr. Waldegrave : When the civil service trade unions used that quotation to make the same point, I wrote to the Financial Times --the hon. Lady may have seen my letter--making it clear that that guidance is about the completely different subject of trading. It is no secret that the Government and, I suspect, the modern Labour party are against state trading. If there is a trading activity, the presumption is that it should be in the private sector. If state organisations want to expand their trading, they cannot do it on the basis of their privileged access to public sector borrowing but should be privatised.

Ms. Mowlam : Then the Minister will distance himself from his statement to The Times conference in June, when he stated clearly that he believed that the private sector was superior to the public sector in delivering services. The Minister cannot have it both ways. He keeps saying that the public sector is far superior and that he wants to keep it, but when we get down to the detail of what the Government want, we find that they want to privatise the public sector.

As I have tried to explain to Ministers, the private sector model cannot be imported into the public sector because the private sector is driven primarily by profits and short termism. It is demand-led to satisfy the customer. In a demand-led system with limited resources--the public sector- -one most decide between the allocation of resources, make political decisions and be

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held accountable. Local democracy and public sector services are important because it is crucial for the public sector to remain in control.

The Minister said that both sides of the House agree on the citizens charter, but the Labour party holds a different concept of the citizens charter. The Minister's view of the citizens charter is that individuals who pay council or poll tax receive services in return. That is a direct contract, just as in the private sector, between the individual and the local authority.

The difference is that the Labour party views the citizens charter more broadly, believing that citizens have rights and that they support services which they do not necessarily use. I have no children but I believe that local authorities should provide services for children. Similarly, I believe that community care, such as care for the elderly, should be provided by local authorities. That is not a direct contractual relationship between individual and provider, which is how the Government perceive the citizens charter. It is a fundamental difference in belief about the role of the individual in relation to the community.

For the Labour party, citizens' rights are not just about the consumer contracts which the Government are trying to provide but about access to information and choice, and equal treatment. We consider those matters to be crucial, which is why we find the Government's hypocrisy so bad when they try to deny access and information to the individual. It was made clear yesterday in the discussion on legal aid. How can the Government say that they are interested in increasing access and information to the individual when they are taking people out of legal aid and allowing only the very rich or very poor to have a chance to use the legal system? No wonder the public are cynical about the Government's belief in the citizens charter and individual rights. For us, accountability is crucial.

Towards the end of his speech, the Minister said how efficiently next step agencies had been performing. I have a couple of statistics that contradict that. The right hon. Gentleman said that the agencies had met their financial targets and some of their standards. The quality targets for 1991 show that only 37 of 53 quality targets, 20 of 28 financial targets, and 28 of 38 efficiency targets were achieved. The Central Office of Information, the National Weights and Measures Laboratory, Vehicle Certification, and Veterinary Medicine achieved not a single quality target.

In answer to my hon. Friend the Member for Birkenhead, the Minister said that pay in the next steps agencies remained comparable. Let us take, for example, the pay negotiations with Her Majesty's Stationery Office. The Treasury target of £4 million meant that the pay settlement for HMSO workers had to be delayed for four months because the agency could not meet the targets set by the Treasury and still pay the HMSO employees the amount that they had been promised. In the end, it was able to offer only 4.7 per cent., which was not the target set elsewhere.

The Minister's suggestion hat the next steps agencies are meeting those quality targets, that the service in the next steps agencies is up to scratch or that the workers are receiving a fair wage when they are taken out of the direct national civil service is belied by the facts.

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The subject of ministerial accountability for next steps agencies has been discussed in the House on numerous occasions. The thousands of letters that Opposition Members receive about disability living allowance problems are legendary. I received a wonderful letter dated 12 November about a constituent in South Bank in Cleveland. We wrote to ask for compensation or an apology from the DLA agency and, after months of delay, that benefit agency finished its letter by saying : "Would you please convey to Mr. and Mrs. my sincere apologies". That is the degree of direct communication between the Department and individuals. If that is the quality service in next steps agencies which the Minister mentioned, the delays in which affect people surviving on minimal benefit under disability living, no wonder Opposition Members are cynical.

If the Minister is committed to quality public services, why cannot he understand--anybody in the private sector will tell him--that, when there is low staff morale and a constant air of uncertainty in an organisation--a sword of Damocles hanging over civil servants' heads day in and day out--we cannot achieve high quality services and encourage people to work efficiently. It undermines much of the good work that has been done in the civil service and civil servants' desire to improve the quality.

The Minister also discussed local authorities and, where contracting out had taken place, how the Audit Commission and the Institute of Local Government Studies had said that they had met their financial targets and therefore things were looking great. May I give some statistics which show that, although they may have met their financial targets, the quality of service that they offered was so poor that many of their contracts had to be cancelled and the service taken back in house.

For example, in the building cleaning section, 39 per cent. of contracts across local authorities are held by the private sector. There have been problems with more than a quarter of those contracts, leading to almost one in 10 of them being terminated. That compares with only 3.5 per cent. of the in-house contracts being terminated. In catering, the figures are similar, with 20 per cent. of contracts held by the private sector, a quarter of which have been terminated. Only 9 per cent. of contracts in the school meals service are held in the private sector, and there have been problems with almost half of that 9 per cent. Of the in-house contracts-- the majority--only four were terminated. Some 28 per cent. of refuse collection contracts are held by the private sector, and there have been problems with 40 per cent. of them, compared with problems with only 12 per cent. of those awarded to in-house contractors.

With such a record, I do not know how the Minister can say that local authorities have delivered a quality service. Contracting out has produced not quality services but the exact opposite. In answer to a question from the hon. Member for Upper Bann (Mr. Trimble), the Minister said that certain services would never be contracted out or privatised. He said that services relating to security could fall into that category.

Security in the Ministry of Defence has been privatised. It started as far back as 1980. By 1988, the MOD had issued 16 contracts to guard 44 sites. They included--as I am sure the hon. Member for Upper Bann will remember-- the Royal Marine barracks at Deal, where Reliance Ltd. was responsible for security. The IRA bombing in 1989

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resulted in the deaths of 11 people. In the aftermath of that bombing, a House of Commons Select Committee report finally forced the Government to review the policy of privatising security. The Committee found that there was

"too high a turnover of staff",

and it identified low pay--to return to the issue raised by my hon. Friend the Member for Birkenhead--as a particular problem contributing to the breach of security. That is an example of a sector that the Minister said might not be privatised but where contracting out has produced unsatisfactory security arrangements.

Elsewhere in central Government, security is still being contracted out, despite the repeated experience of security companies failing to vet employees properly. The West Midlands police found that 20 per cent. of Burns International's applicants had criminal records. If we continue to privatise and contract out services when there are difficulties of low pay and poor security--as shown by the examples that I have given--we shall clearly face problems in obtaining the sort of services to which we are entitled.

Another example that the Minister gave in response to my hon. Friend the Member for Glasgow, Govan (Mr. Davidson) was computerisation. The Minister gave cases involving the many contracts that go out to external companies because the in-house computers are not big enough to deal with the demand. Electronic Data Systems was given contracts to run two of the huge new social security computers in 1989, although it had previously been sacked from the English, Scottish and Northern Ireland national boards for training nurses. The English board director said that a five-year contract worth £250, 000 was cancelled because

"we were unable to test the costings given to us by EDS and couldn't tell if we were getting value for money."

If we look in detail at each of the examples given to us by the Minister this afternoon--computerisation, security, local authorities--we see examples where contracting out has not delivered adequate services. One example not yet mentioned is that of Windsor castle. Let us consider the fire there. In preparation for the privatisation of the Property Services Agency, responsibility for fire protection of royal buildings was transferred to the royal household. Therefore, the fire at Windsor castle provides the prime example of where, if the property had remained in the public sector and the Property Services Agency, pre-privatisation, had been responsible, there might--it is difficult to prove--have been a different outcome.

The Government closed the Crown Suppliers, which was responsible for providing expert advise on fire protection-- [Interruption.] The Financial Secretary to the Treasury giggles, but the Government could not privatise that service as nobody wanted to purchase it, so they closed it. Therefore, the people responsible for providing expert advice on fire protection were not available. Given the record of those two organisations, I hope that the Government will reconsider their plans to privatise English Heritage, the only organisation left with the skill and ability to deal with the problems at Windsor castle.

The Minister mentioned confidentiality. My hon. Friend the Member for Workington (Mr. Campbell-Savours) spoke of the Inland Revenue, and the fear that the same confidentiality as applies in the civil service would not remain. The Minister did not mention that today. On

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previous occasions he has said that we are proud of the confidentiality and impartiality of the national civil service. It would be useful if the Minister could explain the position were the Inland Revenue to be privatised. He mentioned criminal proceedings occurring "after the fact". What use is it to have confidential and price- sensitive information at the Inland Revenue if, when it is privatised, that information is then available for potential leaks to companies? In a takeover, that could make a crucial difference. It is no good stating that criminal proceedings would result, as that would be after the fact, and would be of no help to those involved in the takeover.

The secretarial and information technology services of the Inland Revenue are being put out to tender to private companies, which means that those companies will have access to the tax records of individuals and firms. A problem of confidentiality will obviously arise. Some high profile individuals and companies may have difficulty in keeping their records private.

It is interesting that Members' records are kept in a secure section--PD1-- in Cardiff. It is unclear whether Members' tax returns will be privatised or put out to contract. If that section is excluded from privatisation, does it mean that the Government do not trust the private sector for Members' records but are happy to let private companies have access to everyone else's records? If Members' records are not excluded from privatisation, are Members aware that their tax and financial records are to be taken away from the civil service and placed in the hands of a private company?

Earlier today, the Minister said that he was disgusted that information on the Chancellor of the Exchequer's private finances had been leaked. I agree, but surely that provides a classic example of what can happen to confidentiality and impartiality when organisations are privatised. It is a living example on the front pages of most of today's newspapers, but it does not seem to cause concern to the Minister.

Mr. Alan Williams (Swansea, West) : That is the very point made by the unions at the Driver and Vehicle Licensing Agency. The agency's computer contains the criminal and medical records of people with driving licenses, which could be handed over to a private contractor.

Ms. Mowlam : I thank my hon. Friend as he has voiced our concern exactly. We are worried about the DVLA, which is why we have debated the issue a number of times in the House. We want to explain to Ministers that it is not simply a matter of privatisation, but involves obtaining quality service for individuals and our fears about the information that could come into the public domain as a result.

The Government are trying to skirt around another issue related to contracting out. The Chancellor of the Duchy of Lancaster did not mention it, but I am sure that his hon. Friend the Under-Secretary of State will do so when he winds up the debate. I am speaking of the recent changes in the Transfer of Undertakings (Protection of Employment) Regulations 1981, forced on the Government by the European Court of Justice.

Ministers present and their colleagues on the Committee on the employment Bill are trying to brush aside the fact that their entire market testing programme

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to date has sidestepped the acquired rights directive to rig the competition for contracts in favour of the private sector. The competition should be run on the basis of efficiency and best practice, but has been run on the basis of cuts in staff pay and conditions. That is why the Minister was being economical with the actualite when he said earlier that there would be a level playing field. When services have been contracted out, there has been a cut in staff pay and conditions. That is why the Government have avoided implementing the TUPE regulations. It is no good the Minister denying that.

The truth of my assertion is borne out by those people involved in contracting out who, when faced with the implementation of TUPE, have made the following comments. John Hall, the secretary of the Cleaning and Support Services Association, which represents contract cleaning companies, said of TUPE :

"This will make tendering totally unattractive. It is staggering news. It is probably the most serious challenge ever to our industry and we will fight it tooth and nail."

Mr. Hall, who is also chairman of the Confederation of British Industry competing for quality committee, added :

"If this clause goes on the statute book then there will be little point in our members getting involved in public sector tendering." So it would be useful to find out about the situation with regard to TUPE. I can assure the Minister that a number of people will be taking it to the European Court if the Government try to wriggle out of it again.

On another point of clarification--my penultimate point, Mr. Deputy Speaker --I am pleased that the Financial Secretary finds that good news. I hope that he listens with as much generosity and openness when other people's jobs are put on the line as a result of this Government's policies. Those people will join the unemployment queues, and he sits there completely satisfied with the kind of policies and unemployment that this Government have brought about. I find the arrogance of Ministers like him appalling.

Mr. Ian Taylor (Esher) : On a point of order, Mr. Deputy Speaker. Have you noticed that the Financial Secretary to the Treasury has been here throughout the debate?

Mr. Deputy Speaker (Mr. Michael Morris) : As I have not been in the Chair for the whole of the debate, I cannot comment, but I understand that that is the case and I am sure that it has been recorded accordingly.

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