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Mr. Taylor : I am sure that Mr. Greenslade is more than capable of explaining his votes. He will have to explain them, because he is an elected representative who will have to answer at the ballot box. That is more than can be said for many of the people whom I am talking about in this debate.

Those examples show the removal of power and taxpayers' money precisely from people who are accountable to the local taxpayer through the ballot box. This movement amounts to taxation without representation. The Government are centralising power and marginalising people who are given a mandate by the electorate. It is relevant to take the situation in Wales as an example. At the last general election, 71 per cent. of the Welsh electorate voted against the Government. Only six of 38 seats are held by the Conservatives at present. The Government's response to this move of power from their auspices has been to create more than 100 quangos in Wales.

According to a survey by the department of city and regional planning at the university of Wales, in this financial year executive agencies spent 31 per cent.--almost one third--of the total Welsh Office budget. More than 1,400 people are appointed by Ministers in Wales alone. In other words, Conservatives in Wales have no need to worry that they cannot get elected ; they can get appointed instead. The Chancellor of the Duchy of Lancaster, who is supposedly responsible for freedom of information and the citizens charter, has defended this transfer of power by arguing that the injection of the private values of market testing into the public sector gives the public more power. He argues that, by making the public sector more responsive to the customer, accountability is increased. He claims that quangos are accountable to Ministers and therefore to Parliament.

However, Ministers are able to deny responsibility in practice while having an indirect say through their appointees. In the 1992-93 financial year, £40 million

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disappeared from training and enterprise council budgets, but there was no reprisal on Ministers here at Westminster --there were no resignations.

Contrary to the view expressed earlier by the Minister, all Members of Parliament have had experience of taking up a question with Ministers, who effectively say, "Not me, Guv," and refer them to an agency. It is time that Ministers were forced once again to admit, "It's a fair cop, Guv," just for once about some of the mistakes that are made. The Minister had no answer to the point that Ministers no longer respond to our letters. The Minister's signature is not on the bottom of the letter, except to say, "I pass it to the relevant agency."

In my own county of Cornwall, we can see the very real problems that the destruction of local accountability can cause. I refer first to the health service. Frankly, local people have watched in utter disbelief the mess that has been made of ministerial appointments to the trusts.

First, we saw a well respected chairman of the Cornwall Healthcare Trust sacked for no apparent reason and replaced by a woman with a Conservative party background but against the strong advice of local Members of Parliament, including Tory Members. The previous chairman took the matter to an industrial tribunal and had to be paid off. The non-executive directors then expressed no confidence in their new chair. She was forced to resign, and threatened legal action in turn. Who is responsible ? Technically, it is the Secretary of State for Health. We are told that she took the decision on the appointment personally. Who is taking responsibility ? No one.

In the case of the Royal Cornwall hospital trust, a well-respected chairman was not reappointed. He was given no reason and was understandably outraged, especially as he was the last to hear. I had to intervene before the Minister was even prepared to explain the decision to him.

Now we have the ambulance trust, where staff, doctors and just about everyone else has lost confidence in the senior management, but no one seems able to get it sorted out. That should come as no surprise. Against local opposition, successive mergers have left one trust serving four different health authorities with no one in a position to sort it out. It is demonstrably out of public control.

Mr. Paul Tyler (North Cornwall) : Is not a peculiarity of the situation with the ambulance trust the fact that a quango is answerable to another quango ? Even if one gets an answer from the first quango, one cannot get through to the second because the area health authority is also appointed by the Minister. Is not that double whammy evidence of yet more complication and confusion in the system ?

Mr. Taylor : I suspect that my hon. Friend has found, as I have, that that is yet another quango for which the Minister will decline to take responsibility, and he will pass the responsibility on. It helps the flow across the Minister's desk, I guess.

The NHS is not the only example, and nor is this new bureaucracy the only example, of the transfer of responsibility. In a week when it has been confirmed that South West Water prices have doubled in five years--and

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are set to double again--the management are reaping huge financial benefits, while we are told that Ministers have no responsibility for the mess.

The growth of government by quango has come in part at the expense of ministerial responsibility. However, it comes even more--in contrast to what the hon. Member for Spelthorne (Mr. Wilshire) said--at the expense of local democracy.

There may be problems with local councillors--certainly they do not always agree with Ministers--but those responsible are elected, and the public have some power to hold them accountable. Local authorities have certain requirements. For example, meetings must be held in public, documents must be available for scrutiny and the interests of councillors must be declared, and councillors are governed by strict rules of conduct. In many respects, those rules are far in advance of the procedures which cover this House. Quangos that control large quantities of public money have few formulated regulations to control their operations. Members of quangos do not have to declare their interests, and Ministers say that they do not know the background of those members. Meetings can often be held behind closed doors, and there are few ways of holding those people accountable. Four out of five district health authorities are no longer willing to meet in public, even once a quarter.

Mr. Streeter : The hon. Gentleman seems to be hostile to quangos, if I understand his speech. Will he therefore explain why it is his party's policy to set up an office of utility regulation--itself a quango--to oversee its activities ?

Mr. Taylor : The hon. Gentleman ought to be aware that that would get rid of some quangos by pulling all the utility regulation together, and by giving it greater powers to try to take control of precisely the type of problems which I mentioned in relation to South West Water. I believe that the hon. Gentleman has said that he supports us on that subject.

We need to tackle that matter, and we need the strength to tackle it. Given that those industries have been privatised, and that no one will argue that we can afford to take them back into the state sector, we must have the power to control them. The hon. Gentleman, who represents people who are trying to pay their water bills, ought to be well aware of that.

If the Government were genuinely interested in democracy and accountability, they would have reformed local government further, not neutered it. Rather than transferring power to quangos, we need to ensure that there is freedom of information in all areas of government.

Electoral reform would make local authorities more representative and would ensure that the excesses of the Lambeths and Liverpools, of which we hear so much from Ministers, could not have taken place. There has never been majority support for extremism on either right or left. Democratic reform is a way forward, not the anti-democratic moves by the Government.

I move on now to patronage. Ministers have failed to divulge facts and figures for the number of appointments which have been made. Secrecy surrounds the information on how those people have been selected and paid. That being the case, we must rely on more limited research.

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Nevertheless, the majority of recent appointments to bodies appear to be people who sympathise with Conservative party policy. It is estimated by Cardiff business school that, in 1992, over 40, 000 appointments were directly made by the Government and by Ministers. In the NHS alone, since 1991, openings for appointees have rapidly grown. Each of the 145 English district health authorities has five non-executives appointed. By April, it is estimated that there will be 400 trusts, which means that there is room for 2,000 non-executives to be appointed.

In the past, the people who were appointed have tended to be--I agree with the Minister that it was not always the case--appropriately qualified for the position. One might expect that those appointed to work in the public sector would look to the public interest, and not to a political view. However, people are increasingly appointed without any relevant qualifications, except perhaps that they sympathise with the Government.

Since the Government are coy about releasing details of the background of their appointees, a complete picture is hard to get. Recent research showed that 44 peers receive salaries from sitting on quangos. In that group are 31 Conservatives, 10 Labour peers, no Liberal Democrats and three Cross- Benchers.

In the "File on 4" programme which has been referred to, the Minister Baroness Denton said that the Tory party had never knowingly appointed a Labour supporter. The Chancellor of the Duchy of Lancaster said that she had been quoted out of context. Perhaps he could explain other things she said, and how they are out of context. She said :

"Well, of course, you don't put people in who are in conflict with what you are trying to achieve."

That does not sound out of context to me.

Those people are paid highly for their services. When compared with the payments made to local councillors, they are paid extraordinarily well. Lady Anson, the chair of the Association of District Councils, said :

"you can spend one day a month on a District health authority and you get £5,000 which is more than any councillor will get in a whole year."

That leads me to my third point, which is the huge amount of money which is wasted, mismanaged and improperly spent by quangos. The Public Accounts Committee has given 26 examples of how the inherent lack of accountability has led to the squandering of public moneys. Wessex health authority was censured for wasting at least £20 million in an attempt to establish a regional information systems plan, which was abandoned in 1990. That money could have been spent on health care for the sick. The regional health authority failed to secure accountability from the regional general management. The West Midlands health authority wasted over £10 million by mismanagement from a new and inexperienced appointee. As I have said, most appointees are inexperienced. The PAC report stated : "he was able to follow his own path, making a bonfire of the rules in the process."

In this instance, the director of regionally managed services was awarded redundancy after five years service, when, arguably, he should have been dismissed. He was awarded £82,000 in a lump sum and a yearly pension of £6,462.

Frankly, there is a breakdown of accountability and responsibility which is unacceptable. No Minister has

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come to the Floor of the House and said, "Mea culpa, it is my fault." In the old days, such incompetence would have been the fault of Ministers.

Mr. Waldegrave : The cases which the hon. Gentleman cites do not help his case at all. They were part of the old structure of the health service which have gone back for 25 years or more. They have nothing to do with the reforms, as they are both part of the pre-reform structures of the health service.

Mr. Taylor : The Minister is aware that I am talking not merely about the reforms, but about the role of the unelected state and the lack of accountability. That is what the debate is about, and the Minister should learn from the mistakes of the past.

The reason local government was created in the first place was to turn out the type of unelected public appointments which are now being reintroduced. A study--I forget which--referred to the creation of "a new squirearchy", and that is precisely what is happening. It was abandoned not merely for democratic reasons, but because it did not work. The Minister should remember that.

The falling standards in public life are damaging the fabric of society. Democracy is based on the idea that all citizens can participate and are therefore responsible. We need to trust the people elected as local representatives, but of course we need to have proper checks on them, not least through the ballot box. Given the prevalence of quangos and Ministers' unaccountability in the use of political patronage, it is little wonder that the public are increasingly disillusioned with government.

The removal of power from elected representatives denies the public any sense of participation in the system. Incidentally, it is common knowledge that it is harder to get good people to stand for local government, because people no longer believe that they would have power to do the things that are worth doing. They would simply carry out the Government's cuts.

The Liberal Democrats emphasise the need to return power to people at a local level. The public have to be given a real say in the government of their communities. Local representatives need to be allowed to retain power over their services and be held accountable to the public.

For example, there is no reason why the role of councillors should not be extended to the strategic and supervisory role of district health authorities. DHAs are no longer responsible for delivering the service, but they are responsible for overseeing it. That is a role for local representatives.

Mr. Wilshire : Will the hon. Gentleman give way ?

Mr. Taylor : I am just finishing.

To Ministers who say that local democracy sometimes gets it wrong, I say, of course it does. So do quangos--look at the Public Accounts Committee reports. So do national Government--look at the poll tax and the current tax increases. The essence of local democracy and pluralism is that different people are free to make different choices, and they are accountable for the results of those choices. If Ministers do not like it, the truth is that it is because they do not believe in a pluralist democracy.

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6.41 pm

Mr. Robert Jackson (Wantage) : The Opposition motion invites the House to review the progression towards an unelected state. If the House wants to review this matter to good effect, it will have to go a good deal deeper than the allegations of the hon. Member for Oldham, West (Mr. Meacher). I hope that he will not object if, following the lead of my right hon. Friend the Chancellor of the Duchy of Lancaster, I try to rise above the level that he adopted in introducing the debate.

To criticise the Government on this matter, the House needs to have a proper appreciation of the nature of the problems in the provision of public services which the Government seek to address. From my experience of serving as a Minister in two service-providing Departments, latterly in the Office of Public Service and Science, I would summarise the problems under two headings.

First, and perhaps most fundamental, there is the problem of funding the public services. In 1976 a distinguished former Labour Chancellor of the Exchequer, Roy Jenkins, speculated on whether there was a limit to the share of the gross domestic product that the Government could safely take in taxation and whether that limit had been reached at about 45 to 50 per cent. of GDP. The politics of the 1980s were dominated throughout the western world by a taxpayers' revolt which led to a new consensus in Britain. Since the 1992 general election, the Labour party has come around on the importance of avoiding tax increases. Today, all round the world, governments are struggling to keep down the proportion of GDP which is taken in tax and spent by governments in the provision of public services. The second problem is that, although people will vote against tax increases, they value public services and they want the quality of those public services to improve. So the Government and the House must face the danger of deterioration in public services--both absolutely and relative to the quality of service in the private sector--unless we can either find new revenue resources to fund public services or improve the quality of the management of our public services, or both. It is here that the House will find the root of the phenomenon of the "progression of the unelected state". What is happening within government is not a drive to centralisation for its own sake. It is the application of new ideas about management, which are designed to improve the quality of public services while holding down their cost. There is a new managerialism in Whitehall which derives from the experience of the private sector. Its main themes are a stronger strategic direction from the highest level of the organisation, especially in the form of setting measurable standards of performance, coupled with the devolution of executive responsibilities for delivering services and meeting standards to a level which is as close as possible to the ultimate user of the service. That is the philosophy behind the great wave of public service reforms which began in the mid-1980s and is still rolling forward.

That philosophy was given a classical form in the Education Reform Act 1988. Central standard-setting was established in the national curriculum and associated testing arrangements and this was combined with the delegation of budgets to schools and the opening up of parental choice. It has been developed in the national health service, with the shift of power from the health

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authorities to GP fundholders and national health trusts. In Whitehall it is embodied in the spinning off of executive functions into "next steps" agencies operated under contract with the central Departments, about which we have heard during the debate. The logic of the new managerialism has led the Government to look closely at the whole range of inherited arrangements for the provision of public services. Central to those traditional arrangements is the elected local authority as a provider of services, jointly financed by the central state. It is no secret that central Government have viewed local government with some scepticism as to its efficiency and cost-effectiveness as a provider of services. Three main problems have stood out. First, there has been excessive politicisation in local authority decision-making. That is something that hon. Members on both sides of the House can recognise. Secondly, there has been excessive influence of producer interests in some local authority-run public services, especially where trade unions are closely involved in local power structures with the Labour party. Thirdly, there has been an insufficiency of managerial talent and experience at the political level in local government. That point was touched on by the hon. Member for Truro (Mr. Taylor). Local government leadership is often not at the level appropriate to the tasks that the local authorities now face. Those are serious considerations. If we put our hands on our hearts, we will all admit that.

Nevertheless, the Government's attitude to local authorities has not been one of complete scepticism. The Government have made a serious effort to promote reforms in local government. The concept of the enabling authority, in which responsibility for service provision is separated from the direct provision of the service, has been introduced. New functions have been allocated to local government in respect of community care, following the Griffiths report. Currently, an attempt is being made to promote unitary authorities which are a precondition for greater effectiveness and transparency.

Notwithstanding those positive approaches to local authorities, there is no doubt that one of the most important features of the new managerialism in government has been the shift of responsibilities and power from local authorities to other bodies which are charged with providing public services. That is why we are debating this subject today.

The hon. Member for Oldham, West is in danger of misleading the House if he seeks to persuade it that the changes that have taken place are all in one direction--the direction of centralisation and the substitution of appointment for election. The shifts of responsibility have gone in a variety of directions. Not all the changes have been in the direction of centralisation ; nor is it the case that everywhere elected people have been replaced by unelected people. Much of the shift of power from local authorities has been downwards to more local levels. For example, power has been shifted from local authority housing committees to elected, estate- based housing action trusts ; from local authority education committees to elected school governors ; from many NHS regional and district health authorities to GP fundholders and hospital trusts.

Moreover, much of the reorganisation has affected bodies which have never been elected. I think particularly of the NHS. My right hon. Friend the Chancellor of the Duchy of Lancaster pointed out that NHS bodies have

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never been elected bodies ; they have always been appointed. Where shifts have taken place in this area, they have been downwards, away from the centre.

Nevertheless, it is certainly true that the Government have created a wide range of new unelected bodies responsible for public services and they have expanded the powers and responsibilities of many such bodies.That is the essence of what has been said in the House. Hence the expanding world of the new magistracy to which this debate calls attention and it is a real and important phenomenon.

I have tried to describe the background to these changes and I hope that, in doing so, I may have persuaded some hon. Members that there is a genuine attempt on the part of the Government to grapple with genuine dilemmas. The picture is much more complex than can be summed up by slogans about the benefits of election as against appointment, or about the virtues of decentralisation as against the exercise of central power. I do not agree with Dr. Pangloss, however, that everything is for the best in the best of all possible worlds, and what I want to do in the rest of my speech is to say something about what I see as difficulties in the Government's approach and what might be done to address those difficulties.

I am afraid that the vehemence of the partisanship of the hon. Member for Oldham, West has largely blinded him to the real nature of those difficulties, although they surfaced in the speeches of the right hon. Member for Manchester, Gorton (Mr. Kaufman) and the hon. Member for Truro.

The first difficulty is concerned with efficiency and with what might be called systems overload. There is a real risk of each Government Department pressing its own reform agenda and promoting too many changes too quickly, with insufficient regard for the interaction of those changes across the different areas of policy which fall within the spheres of different Government Departments. For instance, that is a real problem in the current reform of the machinery of central Government. In my own experience, another difficult area has been in respect of Government initiatives overlapping, duplicating and running into one another in inner city areas, where there is now a welcome shift to more local initiatives with the city challenge concept. Meanwhile, we are all aware of the way in which the process of local government structural reform is clashing with the reform agenda in a host of other areas, from the operation of community care to the funding of magistrates courts. A second set of difficulties concerns a problem that has been touched on in the debate, that of accountability. I have no doubt that the managerial changes that we are seeing and that we are discussing today are improving what might be called "high accountability"--that is, the accountability of local managers to the centre, to the Treasury and to Parliament in respect of general policy and of finance. We have only to look at the sheer volume of the management information now published, although all too rarely debated here. There is, however, a gap opening up at the level of what I think of as "low accountability", the accountability of service providers in matters of detail to particular individual users. That is where I have sympathy with the point made by the right hon. Member for Gorton.

The Government are making valiant attempts to address the problem through the citizens charter, and through the setting of detailed performance standards and the establishment of accessible channels of redress. But I do not think that these are as effective as the discipline

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imposed by a disgruntled voter tackling his elected representative. That is certainly true in relation to services at the local level. Hon. Members have also only to think about their attempts to deal, on behalf of constituents, with the Child Support Agency, to name but one, to recognise this problem at the national level.

The third problem that I see arising from the current wave of managerial changes is that of legitimacy. When the Government of Lord Salisbury created the county councils at the end of the 19th century as a vehicle for the provision of the new services that the state was then undertaking, there was a certain Tory statecraft behind the new arrangements which we forget nowadays at our peril. It held that there were advantages for the state in a wide diffusion of responsibility, so that the workings of the national government were not clogged up with detailed problems of local administration and so that a wide cross-section of people were involved and indeed implicated in the processes of local government.

The present position is that Government-sponsored reforms are putting Ministers in the front line of responsibility for a whole range of matters where the competence of Government is limited and their execution of policy is all too fallible. The best instance of this is the sorry saga of the implementation of the national curriculum. It is an important and valuable instrument which I strongly support, but it represents a real challenge to the capacities of the Government and it is one that we must recognise they may not be capable by themselves of meeting. The danger is that if the Government take too much responsibility to themselves they will be faced more and more with an erosion of consent which may spill over from one area of policy to another, perhaps until there is an overall crisis of confidence in the capacity of Government. Some may argue that this is an aspect of the currently prevailing political mood.

The fourth problem has also been touched on in the debate. It is the problem of democracy. Although it may not be how the new managerialism sees the matter, local government is not simply a provider of services, nor is it only one among a wide range of possible alternatives for providing services. Local government is also a vital element in the fabric of democracy, in the operation of a society based on the principle and practice of self-government. Even the element of party, which is sometimes thought to undermine the efficacy of local government, is critical for the working of democracy. All of us here depend upon the health of the party system and if one of the roots of that system, local government, is being damaged by our attentions, we in this House are among those who will suffer.

What should the Government be doing about all this ? I would not urge them to abandon the drive for managerial reform. The issues that I outlined at the beginning of my speech are too important and too difficult for that. But I do urge them to beware of the seductiveness of what Hugo Young, I think it was, christened "the big idea". In our system of government Ministers have only a short time to make their mark on their Departments and it is all too easy to take some prevailing idea--for example, the introduction of the concept of the market into the provision of public services, which was a valuable and good idea, by the way--as a sort of leitmotif and be led by it up hill and down dale until in the end the idea and its integrity seem to matter more than the complex reality to which it is being applied. So my first advice is to beware the big idea.

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My second piece of advice would be to pay attention to the question whether particular ideas really work and whether they will work in the way that is intended. Too often pilot projects are not really pilots but vanguards. Too often ideas are taken over from the private sector without much attention either to their proven value in the world of business or to their applicability in public sector conditions, which are often very different. I have in mind the way in which performance pay is being introduced into public service management without sufficiently serious evaluation of its effectiveness in motivating public servants.

I conclude with two suggestions about institutions. The first is local government. I believe that the Government are sincere in their desire to turn over a new leaf with local government, but what we need is a clear, consistent and well-explained policy for strengthening the institutions of local government. The philosophy of unitary local government is a welcome step in this direction, however disruptive its introduction will be. The Government should think again about the way in which the business rate is raised. More will have to be done to build the confidence and strengthen the morale of local government and to attract better people to seek election to it. We should look again at payment for councillors. The Government must recognise that the more they create alternative vehicles for service provision, the less incentive they offer to good people to seek election to local government. In that sense, there is a self-fulfilling element in the analysis which criticises local government as being short of talent.

Finally, and very close to home, there is Parliament, the one institution that has so far remained almost untouched by the wave of managerial change. That is not just because of the difficulty of making any changes here without all-party consent. It is also because it suits Ministers to have a House of Commons that was designed for a system of government quite different from the system now emerging.

A time-hallowed phrase has it that our role in the House is to hold the Government to account. In reality, we are hardly equipped to secure the kind of accountability required by modern government. Our historical role, which was expressed cogently by the right hon. Member for Gorton, has been to represent constituents, voice grievances, vote supply and sustain the Government of the day. The trouble is that, today, that role is not enough. Perhaps this debate is an effective illustration of that proposition.

If Parliament is to hold modern government to account, it will require a much more professional structure in which power will inevitably be more widely diffused than it is today. For example, we shall need to think in terms of the constitution of powerful Committees, embracing the functions of present Select and Standing Committees and enabling their members to be real partners in government with the Executive.

The Opposition have done a service to the House by raising this important issue. I just wish that they had presented the case at the level which the issue deserves.

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7.2 pm

Mr. Alan Williams (Swansea, West) : I congratulate the hon. Member for Wantage (Mr. Jackson) on a thoughtful speech. It was a helpful contribution to the debate.

Before the Minister leaves, may I quickly take up the point that he made? I shall not go down the spoils system route. He referred to the "dismissal" of the noble Baroness Macleod. His information is only partially correct. When I was Minister responsible for consumer affairs in 1974-76, I reappointed the noble Baroness as chairperson, to use modern parlance, of a consumer organisation because she had done a good job and I felt that, at that stage, consumerism needed a consensus approach. I also reappointed the now noble Lord Orr-Ewing as chairman of the Metrication Board. I am not sure whether he regarded that as a kindness, but when we meet he is, at least, still friendly and we still hold conversations.

As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, one makes appointments from one's own side ; but also, if one respects the rights of the Opposition, one also makes appointments from the other side.

Mr. Waldegrave : I agree with that and I am happy to pay tribute to the right hon. Gentleman for having partly righted the wrong done to the noble Baroness in the first instance when she was rather abruptly fired from her first consumer position.

Mr. Williams : I reappointed her because she had done well the first time. So she had a second tour of duty. I do not wish to make a major issue of this matter, but someone has given the Minister inaccurate information.

On the points raised by the hon. Member for Wantage--I am sorry that my referring to them ties him to the Bench for a little longer when he could be enjoying a meal outside--it is salutary to reflect that, like my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), I am in my thirtieth year in the House of Commons. It dawned on me only earlier today that I have spent half that time under this Administration, since they came to office in 1979. Many changes have taken place over the 30 years and many have taken place over the past 15.

This is a good opportunity for us to pause and review the changes, both structural and, more importantly, in the attitudes of those exercising power in the past 15 years, and to consider whether, ultimately, the citizen is worse or better governed. Even more important, we should consider whether citizens' rights under the rule of law have been enhanced or diminished.

May I begin with the simpler of the two issues : the structural changes already mentioned by several hon. Members. We have seen the emergence of "satellite" government. A series of organisations are now in orbit at different distances from Whitehall. First, we have the "next steps" agencies, which I call the "first step" agencies as they have been set up for hiving off at the appropriate time. Those agencies are the nearest to earth in an accountability sense. Secondly, we have the quangos. Thirdly, we have the services that have been contractorised or even privatised.

It is worrying to reflect that in Wales, for example, once the reforms now going through another place are implemented, more appointed members on boards of quangos will administer £2.1 billion than elected councillors who will administer £2.5 billion. It is important to recognise the intimate range of services involved in

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those hived-off organisations. The health service has a pyramid structure of quangos, with the national health service execituve, the national health service supplies executive, regional executives, district authorities and trusts. It is increasingly remote, in terms of accountability, from the people it is supposed to serve. The same applies to housing. No one can pretend that housing associations are accountable. As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, the emergence of agencies has made the job of Members of Parliament more difficult and constituents' cases harder to press.

When we discuss the question of diminished accountability and the diminished powers of this House, as others have rightly said, it means a diminution not in hon. Members' egos--much as that may matter to some hon. Members--but in our ability to represent and press the cases of those whom we, in turn, represent via the ballot box.

Mr. Hall : Is not the other side of that coin the fact that the Government are then less accountable, and can be held less accountable by Members of Parliament on behalf of their constituents?

Mr. Williams : Yes, that is so. Ministers have created an armour- plating between them and the House. It is significant that three of my hon. Friends hoping to participate in the debate and the hon. Member for Wantage were all on the Public Accounts Committee because the important point about the proliferation of those satellites is that the power to audit and control taxpayers' money is being diminished. It is not only Members of Parliament who say that but the Comptroller and Auditor General and the National Audit Office. They are worried about the problems presented to them and the proliferation of accounting and auditing problems. Between a quarter and a fifth of total public expenditure is being exercised and controlled by unelected individuals.

I have made a point that attitudes matter even more. Something that we rarely think about is worth bearing in mind : what is the effect of these changes on people who--whether hon. Members think they should or should not have done so--have committed their lives and their careers to the public service? The civil service, which many hon. Members resent, used to be a lifetime service. Its security for the individual was also security for the public, in that people did not have to worry about political pressures.

What is the cumulative effect on a full-time civil servant--in the Driver and Vehicle Licensing Agency, for example--who sees get-rich-quick business men poised to take over the contracts for the work that he and his colleagues have been doing over the years? What is the effect on such a person of the sell-off of public assets at knock-down prices? What is the effect of his seeing his colleagues in the "next steps" agencies--one third of a million civil

servants--fearful for their future employment and driven to considering buy -out, sometimes in circumstances that have given rise to considerable concern among those of us who are members of the Public Accounts Committee, as in the case of the ex-chief executive of Forward Catering, who, without notifying the Treasury that he had set up a private company, was busy organising the purchase of the operation of which he was chief executive?

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What is the effect on public servants when they hear the public ethic derided, diminished and regarded as second-rate by comparison with the market ethic and the make-a-quick-buck philosophy? What is the effect on the person who entered the public service many years ago, regarding it as his career, of the news that the Government are now thinking in terms of short-term contracts?

The public servant is bound to question the basic--if I may use the word "basic" without being accused of being snobbish--public ethical standards in which he was trained and by which his activity has been guided over the years. It is therefore not surprising that the Public Accounts Committee, for the first time ever--this is the additional importance of the Committee's devastating unanimous report--recognised that the new situation has created the circumstances for sleaze or corruption or simply for the diminution of standards that we should be, and in the past have been, able to take for granted.

The Chancellor of the Duchy of Lancaster mentioned the health service quangos. I should like, in passing, to make the point that they are a long way from being the virtuous organisations that he thinks they are. We have pointed out that Sir Duncan Nicholl, a retiring chief executive, is the Sylvester Stallone of Whitehall in that he has appeared before the Public Accounts Committee in so many repetitions of the same story. At the end of it all we were told that a letter of reprimand had been sent. One can imagine members of quangos shivering in their shoes when the postman arrives lest he be carrying a letter from Sir Duncan saying, "You have been a naughty boy ; do not do it again."

It is a rather sad joke to find that Sir Robin Buchanan, ex-chairman of the Wessex health authority, who gave to the Secretary of State who appointed him an assurance that he would introduce penalty clauses into a contract that went wrong, told the authority's solicitor that penalty clauses were not to be included. Far from getting one of Sir Duncan's little buff envelopes, Robin Buchanan received a knighthood and was promoted and put in charge of the multi-billion-pound national health service supplies executive. As has been said, there are institutional ways of addressing this problem. We may well have to think in terms of new sanctions, such as those that exist in the field of local government--surcharging or debarring from public office--as an extra weapon in the armoury of those who monitor these organisations.

However, I do not want to go into too much technical detail at this stage. I want, instead, to move to an aspect of the unelected state that has not been considered so far today. To my mind, this is in some ways the most serious development of the 30 years during which I have been a Member of Parliament. I refer to the unconscious, unintended politicisation of the civil service that has inevitably taken place through the erosive persistence, for 15 years, of the unchallenged "one of us" philosophy. Inevitably, as I hope to demonstrate, that has led to politicisation.

A couple of weeks ago the Public Accounts Committee heard from Sir Tim Lankester on the question of Pergau. Sir Tim's evidence was a breath of fresh air. It was almost like the last charge of the old brigade of the civil service. Here was a civil servant imbued with the old attitudes of the public service, willing to put his career on the line and to say to the Prime Minister and the Foreign Secretary that he, as a civil servant, was not willing to make payments out

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of the aid budget unless they gave him a written direction as he considered that that would be an abuse. I wish that more civil servants had that sort of courage.

Alas, more are like the one from whom we heard at the very next sitting, when we were dealing with the Insolvency Service. We were told that 50 per cent. of directors of private companies whom the service thinks should be disqualified in the public interest are not disqualified as there is a shortage of manpower for the purpose of processing disqualifications. The official was asked whether he had requested more manpower, and he replied that only a small number had been asked for. When he was asked why only a small number had been requested, he said that he knew that he would not get more. I asked him if he did not see that, in a way, he was making the decision for the Minister, by whom decisions about the level of manpower needed to carry out the statutory duties laid by the House of Commons on his organisation should be made. I put it to him that it was not for him to presume that the Minister would turn down his request, saying that if manpower were not provided the Minister would clearly be responsible.

The final and shattering answer was received when I asked him what calculation he had made if he did not ask for the manpower that he needed. He again said that he had not even made a calculation : it was pointless because he knew what the Minister would say. This is what I mean by politicisation : civil servants begin to think as Ministers think.

I am sorry to become anecdotal, but when I was at the Department of Industry I saw an under-secretary in the outer office to my office and I asked my private secretary what he was doing there and whether he wanted to see me. He replied that he did not want to see me, but wanted a steer on my thinking on a subject. I told my private secretary to tell him that he would not get a steer and that I did not want him to ask that question again because he was paid to give me his best advice while I, as a Minister, was paid to decide whether to accept it. Many of the problems caused by the ill-thought-out legislation that we are having to deal with in the House may have arisen because, after 15 years, civil servants are thinking as they think that their Ministers will think.

I do not claim that my approach involved great virtue--it was motivated by self-interest. As Ministers are finding out, it is far better to find out that they have got it wrong in the privacy of their office than when they are standing at the Dispatch Box or dealing with rebellions in the other place. People who understand the system and who have not been consulted are exercising their power to take action.

I am not being disparaging, but some hon. Members, especially those who have formed the new intake and have never been in opposition, may ask whether it really matters to the public if civil servants identify too closely with the policies and philosophy of their political masters--I hope that hon. Members will excuse the phrase. Of course it matters if citizens' rights suffer to any degree as a result.

We are learning the most profound lessons from the Scott inquiry. It is shattering that three of the most senior civil servants in the land could have met to conspire to withhold from the defence counsel evidence that could have proved the innocence of those on trial.

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