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powers of contracting out that are being claimed by Ministers were permissible. Again, the Government refused to accept our proposal. That brings us to our amendments. The Government are being asked to incorporate at least the kind of consultative mechanisms that are enshrined in the procedures relating to chapter 1. It is a modest, tepid demand. It merely asks for consultation to be built into the procedures. The issue is whether this Parliament has now become so supine that it will happily be overruled by the Government yet again and not even be prepared to take on board the notion of building in a consultative procedure. My conclusion, I am sorry to say, is that Parliament is probably so supine and will therefore probably reject this proposition.

Ms Glenda Jackson (Hampstead and Highgate) : My hon. Friend the Member for Newham, South (Mr. Spearing) spoke of the grave constitutional danger that will be inherent in the Bill of power cascading away from this place almost like confetti if our amendment is not accepted. The danger is that it would not be confetti that would be falling on the heads of the general public, but hail, and because of that it would be extremely dangerous.

My hon. Friends have said that outside bodies in whom the Government seem to place all their trust in terms of saving money for the taxpayer have significantly failed so to do. I understand that £565 million was paid in consultancy fees and that it saved the taxpayer precisely £10 million.

I am still somewhat bemused as to what the Government have in mind by putting these clauses in the Bill. Surely it cannot still be their malicious belief that everything in the public sector is bad and everything in the private sector good. Only today, the OECD published a list of management skills and, of the 22 countries defined, this country is at the bottom. Britain has the worst management skills, but it seems that the Government are rushing to destroy those skills and the public sector which has attracted great admiration throughout the world for the impartiality of the civil servants who engage in delivering policies to the public.

The essential part of any partnership, and that in essence is what we are discussing, is the ability of both sides to consult each other freely and openly. Our amendments would make that possible and would in no way damage what the Government are essentially attempting to do by way of the Bill, nine tenths of which I disagree with.

Mr. Neil Hamilton : A number of detailed points have been made in this interesting debate. I hope to be able to deal with all of them, but if I neglect to do so, I hope that Opposition Members will accept my writing to them and making the correspondence more widely available.

The Government's "Competing for Quality" programme has shown how the introduction of greater competition in the provision of public services has produced better value for money. It is not, as the hon. Member for Hampstead and Highgate (Ms Jackson) has just said, entirely about saving money. It is also about improving the quality of public services : we do not measure the gains simply in monetary terms.

Some parts of public service have been prevented from seeking these gains by barriers arising from the way in which certain statutes have been framed. The measures in

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part II will rectify that by overcoming, subject to essential safeguards, outdated legal restrictions that bear little relation to the needs of today. Clauses 59 and 60 are the mainstays of those provisions.

The obstacle addressed by those clauses is the general presumption in law against delegation of functions conferred by legislation on a Minister, office-holder or local authority.The law already makes exceptions to this presumption for civil servants, the so-called "Carltona" doctrine, local government officers and the staff of many office holders. Clauses 59 and 60 would merely provide for a simple extension of this principle to contractors in appropriate cases. As the hon. Member for Cannock and Burntwood (Dr. Wright) said, that matter was debated extensively, if not exhaustively, in Committee. The clauses would allow for the employment of contractors by Ministers, office-holders or local authorities in carrying out their statutory functions. Of course, before a Minister lays an order, each function will have to be carefully considered on its own merits to determine if it is appropriate for market testing or contracting out at any given time. The issues to be considered include the need for accountability ; adequate protection of confidential information ; the need, as appropriate, for impartiality ; and the effect on the interests of third parties. There are strong safeguards on those points both in the Bill and in existing law.

The hon. Member for Newham, South (Mr. Spearing) asked why we were promoting amendments Nos. 101 and 102. We recognise that there is a question of constitutional principle in respect of officers of Parliament and judges and their independence of the Executive. In Committee, we moved an amendment that excluded parliamentary officers from the ambit of the Bill and now, as promised, we are tabling a further amendment to mark the constitutional separation of the judges from the Executive. The amendment marks a constitutional principle. I hope that the hon. Gentleman will accept it on that basis.

8 pm

On amendment No. 42, about which the hon. Member for Norwich, South (Mr. Garrett) spoke extensively, the Government view is that it would be inappropriate to specify a statutory requirement for consultation in the general sense. Departments and staff must have freedom to negotiate appropriate consultation arrangements to the benefit of both. The Government's guide to market testing offers guidance to Departments on that and states that managers should consult staff and their recognised trade union representatives during the market testing of an activity. Trade union sides should be consulted about individual market tests at the start of each test and at appropriate stages during the test. Consultations should allow sufficient time for that to be effective. That guidance and any existing departmental consultation arrangements are not changed by the provisions in the Bill.

The House will wish to know that, in addition, discussions are currently taking place with the Council of Civil Service Unions on an appropriate framework by which departmental and agency discussions on arrangements for consultation on the form that an order takes could be guided.

I now deal with amendment No. 93, which was tabled by the hon. Member for Newham, South. All functions would continue to be carried out as required in the relevant enactments. The Bill in no way permits an order made to change the nature of the statutory function that it would

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specify. It is misleading, therefore, to suggest that, through the employment of contractors, functions are somehow being extended. The functions remain the same. The only change is that Ministers and office-holders will now have the choice of whether to employ contractors or their own staff to discharge their functions, whereas at present they may employ only their own staff. The Government would remain fully responsible and accountable for the exercise of the function.

There also seems to be an assumption that people will be affected significantly by a change in who delivers the public services and activities. There is no reason to believe that the recipients of services undertaken by contractors would be adversely affected. Indeed, experience to date has shown how increased competition can deliver improvements in service in both quality and value for money.

Mr. Spearing : I am grateful to the Minister for that reply and also for his reasons for amendments Nos. 101 and 102. Although I agree that the function does not change, he has admitted that the person exercising it does, and that it may be more numerous. Clause 61 provides for a restriction where the liberty of the subject would be affected, but unless the subject is informed, how can any Minister tell that he will not in future be in dire trouble ? Would not consultation with the public be a good thing ?

Mr. Hamilton : The hon. Member for Cannock and Burntwood (Dr. Wright) provided the answer to that in his speech. It is a permissive power. Before any particular function is contracted out, there will have to be another debate in Parliament on the specific proposal that might come forward. If there are specific reasons why an individual function should not be contracted out, hon. Members will have the opportunity to advance their arguments.

I disagree with the whole tenor of the speeches of Opposition Members this evening, particularly that of the hon. Member for Dundee, East (Mr. McAllion), who spoke of morale in the civil service. I appreciate that, for many civil servants, market testing will change the way in which they do their jobs ; some will find themselves with a new employer, and some may lose their jobs, although there is no presumption that that will be the case in any particular market test. Naturally, a change that entails those possibilities will cause anxiety--I fully understand that--but the civil service has no right to a monopoly on the services that it carries out.

In the private sector, the kind of uncertainties that we are talking about tonight have been far exceeded, particularly in recent recessionary times. We are talking about value for money for the taxpayer, and if this policy can achieve it, I believe that it is entirely justified. But, increasingly, civil servants will have to show that they are the best place to deliver a service. If they are providing the most effective service on offer, they will retain the work. It is simply part of the modern world that there can be no assumption of a job for life, whether in the public or, indeed, the private sector.

Mr. McAllion : How can the civil service be given the opportunity to market-test its skills against the private sector when the Government are applying the "prior options" test, which directly privatises or contracts out directly into the private sector without allowing in-house bids ? How can those people get a chance to prove that they can do the job better and give better value for money ?

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Mr. Hamilton : We are talking about contracting out, not privatisation. The hon. Gentleman should reconsider his position, because we are talking about the interests of the taxpayer. We are all taxpayers. We all want to see Government functions carried out efficiently and cost- effectively. All that clauses 59 and 60 will provide us with is the mechanism to achieve that, which I should have thought would unite the House rather than divide it.

On that basis, I invite my hon. Friends to support the Government amendments and resist those of Opposition Members.

Amendment agreed to .

Amendment made : No. 102, in page 51, line 31, at end insert (1A) A function is excluded from this section if its exercise would constitute the exercise of jurisdiction of any of the following, namely

(a) an appeal or appellate committee of the House of Lords ; (b) the Judicial Committee of the Privy Council ;

(c) any part of the Supreme Court ;

(d) the Court of Session and the High Court of Justiciary ; and (e) a county court or, in Scotland, a sheriff court.'--[ Mr. Neil Hamilton. ]

Amendment proposed : No. 42, in page 51, line 36, leave out from section' to end of line 37 and insert

(a) in relation to any function of a Minister, without first consulting any officer exercising the function on behalf of the Minister and any organisation appearing to the Minister to be representative of such officers, or

(b) in relation to any function of an officer-holder, without first consulting him, any officer exercising the function on his behalf and any organisation appearing to the Minister to be representative of such officers.'.--[ Mr. Garrett.]

Question put, That the amendment be made :

The House divided : Ayes 229, Noes 279.

Division No. 253] [8.05 pm

AYES

Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashton, Joe

Austin-Walker, John

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Rt Hon Margaret

Beith, Rt Hon A. J.

Benn, Rt Hon Tony

Benton, Joe

Bermingham, Gerald

Berry, Roger

Betts, Clive

Blair, Tony

Blunkett, David

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Burden, Richard

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Menzies (Fife NE)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

Cann, Jamie

Carlile, Alexander (Montgomry)

Chisholm, Malcolm

Clapham, Michael

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Cohen, Harry

Cook, Robin (Livingston)

Corbett, Robin

Corston, Ms Jean

Cousins, Jim

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

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

Dewar, Donald

Dixon, Don

Donohoe, Brian H.

Dowd, Jim

Dunnachie, Jimmy

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Enright, Derek

Evans, John (St Helens N)

Fatchett, Derek

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