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Column 964board the recommendations and ensure the proper conduct of public business and the proper accountability of public money.
The Financial Secretary to the Treasury (Sir George Young): I begin by welcoming the hon. Member for Bristol, South (Ms Primarolo) to her new position and by commending the speed with which she mastered her brief. I must say, however, that the last two or three minutes of her speech did not carry me and, I suspect, my colleagues wholly with her.
It has been a good debate, broadly free from partisan remarks. It shows that the House can meet on common ground and debate how it can best protect taxpayers' money and promote the highest standards in public service.
Let me begin by adding my thanks to those of others for the dedicated efforts of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and his colleagues on the Public Accounts Committee during the past year. This month marks the 30th anniversary of three members of the Committee as Members of Parliament--an observation which says much about the personal expertise of the Committee. The right hon. Gentleman has been closely associated with the Committee for much of that period and in his 11th year as Chairman, he has brought great wisdom and experience--not least as a Treasury Minister--to its work. It is greatly to the credit of the right hon. Gentleman and his Committee that the PAC probably enjoys greater respect, not only in Parliament, but in the country as a whole, than it has ever done in its long and distinguished history. That that respect is shared by the Government is demonstrated by the fact that, according to the latest National Audit Office annual report, the Government accepted 95 per cent. of the Committee's recommendations last year. In addition to thanking the Committee Members, perhaps I could also thank the hon. Member for Birmingham, Hodge Hill (Mr. Davis), who stepped down earlier in the year after eight years of
conspicuous--sometimes very conspicuous--service.
The achievements of the Committee are, of course, founded on the work of the Comptroller and Auditor General and his staff at the NAO. The Government wholly support the work of the Comptroller and Auditor General. Strong, independent auditors, serving a strong and independent Public Accounts Committee are essential to the maintenance of proper standards of public administration in this country. The Government recognise the key role played by the PAC in setting those standards and in seeing that they are adhered to. The Government pledge themselves to playing their full part in maintaining the integrity of standards in public service. The NAO reports that the Government pay most attention to the critical reports. But I shall mention in passing today's report, which compliments the Treasury on its effectiveness in the recent sale of BT shares.
I have not served on the PAC before, nor, I confess, have I taken part in its debates. However, as a former spending Minister, I am familiar with its work. I used to have responsibility for the Property Services Agency-- [Interruption.] --one of the regular suspects rounded up by the PAC and asked to account for itself. Now, as a
Column 965Treasury Minister, I am grateful for the savings of £229 million made last year as a result of the NAO's value- for-money reports. No one should believe that the issues that we have debated today are new. I asked for details of the PAC's past work and I found, in 1889, that the Committee was complaining about the absence of competitive tendering for the celebration of the Jubilee of Queen Victoria's reign! My predecessor made an excuse, which I fear may have irritated the Committee, that,
"as a rule, these things have to be done in a very great hurry". As a Jubilee celebration is, by definition, a predictable event, it seemed a rather weak reply. I hope to do better as I respond to today's debate.
The right hon. Member for Ashton-under-Lyne mentioned silence clauses, and the point was picked up by other hon. Members. Like them, I deprecate the kind of silence clause that we have heard about today. In the case of the Welsh Development Agency, such undertakings are no longer required when a member of staff leaves. In addition, the national health service executive has agreed with the conclusion that such clauses are unjustified and the NHS is now issuing guidance.
The point raised by the right hon. Member for Ashton-under-Lyne about secrecy leads to a more general point about openness. That ties in with comments made by the hon. Member for Cannock and Burntwood (Dr. Wright). Openness is a key weapon on the part of the Public Accounts Committee and the Government in deterring, preventing and detecting abuse. Secrecy must play no part in the role of non-departmental public bodies.
The code of best practice for board members states that public bodies and their boards must at all times comply with all reasonable requests for information from Parliament, from users of services and from individual citizens. Each year, the annual report should provide a full description of the board's activities and state the extent to which key strategic objectives and financial and other performance targets have been met. It should list the names of the current members of the board and some senior staff and provide details of their remuneration. I agree with much that was said about openness. The right hon. Member for Ashton-under-Lyne said that the losses that are incurred are not impersonal losses with no losers. We heard about people who may have lost their pensions and there was inevitably a knock-on effect for those affected in the NHS. We have not been talking about victimless incidents.
Another general theme mentioned by the right hon. Member for Ashton-under- Lyne which was referred to by other hon. Members, including the hon. Member for Caithness and Sutherland (Mr. Maclennan), related to access. As the House is probably aware, the Comptroller and Auditor General is the statutory auditor of all Government Departments, executive agencies and trading funds. He is also the auditor of half the executive NDPBs and he has inspection rights in respect of all those where he is not the auditor. The CAG is the auditor of almost all advisory NDPBs and of the summarised accounts of the entire NHS. The National Audit Office can carry out value- for-money studies at all Departments, all executive agencies, all trading funds and all NDPBs, throughout the NHS, the
Column 966universities and grant-maintained schools. The NAO has inspection rights in universities and grant-maintained schools.
In addition, the National Audit Act 1983 provides the CAG with a statutory right of access to any other public body whose members are appointed by, or on behalf of, the Crown and which receives more than half its income in any year from public funds.
Access to a wide range of other bodies, including many in the private sector, has been arranged by agreement with the sponsor Department. As the Government have emphasised, the need for the CAG to have access to any other body will be considered on a case-by-case basis.
As was mentioned in the debate, the right hon. Member for Ashton-under-Lyne and my right hon. Friend the Member for Horsham (Sir P. Hordern) have recently discussed with the Chancellor of the Exchequer the question of NAO access in contracting-out cases. The guidance issued by the Treasury and the Cabinet Office states unequivocally that satisfactory arrangements for NAO access must be made when services are contracted out. However, of course, the Government will give the most careful consideration to any specific recommendations that the Committee might make on the subject of NAO access.
Mr. Maclennan: Would not it be more appropriate for the assumption to be that the NAO has a right to intervene and to oversee the spending by NDPBs unless, perhaps, that particular NDPB seeks exemption from, as a result of a ministerial intervention, giving grounds in the public interest?
Sir George Young: As the hon. Gentleman is aware, the Government's view is that at the moment there is no need to extend the statutory right of access and I have been through the position as we see it. However, we recognise that that is a subject on which there are strong feelings on both sides of the House. As I have just said, we will give careful consideration to any specific recommendations from the Committee relating to NAO access. I cannot say more than that at this stage.
Mr. Sheldon: I am not sure what that means. Does it mean that the NAO will not have access until the PAC considers the matter? Obviously the first step in an investigation is taken by the NAO itself. Until it has information, it cannot say what is missing or what is not missing. If there is a competitive situation in which collusion is suspected, we are talking about a very important safeguard for the NAO. I do not believe that the private sector needs to be worried about these matters. After all, such practice is common in the defence industries, which are only too happy to tender for business knowing full well the consequences. A similar acceptance would arise in a wider area.
Sir George Young: I am grateful to the right hon. Gentleman and I have seen the record of the meeting that he had with my right hon. and learned Friend the Chancellor where those points were rehearsed. We would like to reflect on the points made at that meeting and see how best we can respond. I hope that the right hon. Gentleman will understand that there is not much more that I can say at this stage. I refer now to the detailed points raised by the right hon. Member for Ashton-under-Lyne and others. Clearly, the situation in the West Midlands regional health
Column 967authority described in the PAC report was wholly unacceptable. The Department of Health accepted that all areas of the NHS should be publicly accountable and subject to review of their performance. All those in the NHS concerned with the expenditure of public money should be aware of their responsibilities and the need for strict propriety.
My right hon. Friend the Secretary of State for Health has published codes of conduct and accountability which set out a framework against which the conduct of public business in the NHS can and will be judged. Those codes of conduct have been adopted by all NHS boards in England.
The hon. Member for Southampton, Itchen (Mr. Denham) raised several detailed issues about Wessex regional health authority. If I may, I would like to reply to him in writing. However, the very thorough investigation by the PAC followed that of the district auditor which was undertaken at the request of Wessex regional health authority. The PAC report welcomed the action taken by the NHS executive and the RHA. That action will ensure that the lessons have been learnt across the NHS and that the events which the PAC rightly criticised do not recur.
As I have just said, codes of conduct and a code of accountability have been implemented. Among other things, that requires a clearer definition of the functions of chairmen and non-executive board members of health authorities and NHS trusts. National health service boards are required to establish audit and remuneration and terms of service committees. Board directors are required to declare any private interests that are material or relevant to NHS business. With regard to the British Council, there was a different incident as "a criminal gang", to use the PAC phrase, was involved. My hon. Friend the Member for Billericay (Mrs. Gorman) asked what happened. In that case, as I believe the Committee will know, eight people have been charged and a trial has been set for January 1995.
New enhanced control mechanisms are now in place in the British Council, new financially qualified and experienced staff have been recruited, and a new audit committee has been established. The delayed programmes were in sectors that were funded by the council's own revenue-earning activities. It is a little harsh to move to the judgment which was suggested by my hon. Friend the Member for Bristol, North-West (Mr. Stern)--the ultimate sanction of having the system removed--but I notice that that is an ultimate deterrent to be used only when everything else has failed.
A judicial review of the legality of expenditure on the Pergau dam is set for 9 and 10 November. The important point that arose is that of ministerial directions to officials. The Government have accepted the Committee's recommendation in its report on Pergau that in future, where such a direction is issued to overrule official advice on matters of economy, efficiency and effectiveness, the accounting officer will pass the relevant papers to the Comptroller and Auditor General without undue delay. The Treasury memorandum on the responsibilities of an accounting officer is being amended to reflect that.
Column 968On rural Wales, I was grateful for the kind words following the issue by the Treasury of guidance to all Departments covering expenditure on staff benefits in NDPBs and the need for arrangements to ensure that NDPBs do not act beyond their delegated authority. My hon. Friend the Member for Uxbridge (Mr. Shersby) put the debate in context by reminding us that most of the money that is spent is spent legitimately and properly and that one should not get the matter out of perspective. He also drew attention to the eighth report, to which I shall return. It made sense for the PAC to stand back and see whether it could identify some of the common themes that had emerged from its reports and use its influence to identify those themes, promote them and publish them to make sure that we learnt lessons from its experience. I am grateful to my hon. Friend for his kind words about people at the senior levels of Customs and Excise and the Inland Revenue.
I listened with respect to the hon. Member for Caithness and Sutherland, as I always do, but he overstated his case. I listened to the quotations from the eighth report and I have read it again. I could not find the causality between reforms and failure which he asserted. Other members of the Committee were also unable to trace that causality. I defend with vigour my new Department, which said that it rejected the inference which has been drawn from the report, because I do not think that the report directly comes to that conclusion.
My hon. Friend the Member for Orpington (Mr. Horam) stressed the benefits of the programme for next steps agencies in terms of improved efficiency and job satisfaction. He made several helpful suggestions about how the House of Commons itself might more closely monitor the Executive-- suggestions on which it would be imprudent for me to comment.
My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) again stressed that, by comparison with other countries, our standards are of the highest. He also commented on the improvements in performance in some next steps agencies.
I share the views of the right hon. Member for Llanelli (Mr. Davies) about computers. There can be no excuse for treating investment in computers any differently from any other capital expenditure. There must be value for money and so on. On termination settlements, on which the right hon. Gentleman commented, detailed guidance has now been issued to health authorities and to NHS trusts on the principles and procedures to apply when considering severance payments to senior managers. That underlines the importance of having due regard to probity and value for money. Trusts have also been asked as an interim measure to provide a quarterly return to the NHS executive setting out the termination payments that they have made. My hon. Friend the Member for Bristol, North-West again made the point that some private sector institutions could not have survived the scale of loss that parts of the public sector have survived, because they would have gone out of business. He also made the valid point that one should not assume always that the public sector has higher standards than the private sector. What he said on that subject was particularly relevant.
On the Field system, we accept that mistakes were made in the management of the project. The Department has learnt the lessons. The Government's view was there
Column 969was no practical alternative but to proceed with the project, because without it the training and enterprise councils' ability to manage public money would have been jeopardised.
On Scottish Buses, which was raised by the hon. Member for Warrington, South (Mr. Hall), the Department was satisfied that the price received for the Scottish Bus Group companies accurately reflected their market value at the time of sale. The reduction in SBG profits during the pre-sale period was the result of declining economic activity and extreme vulnerability to competition in a deregulated market.
On grant-maintained schools, the Treasury minute, I hope, responded positively to the PAC's recommendations. The National Audit Office's report recognised that the Department for Education and individual schools had approached the change in status and the new financial regime with a large measure of success.
The hon. Member for Cannock and Burntwood, who apologised for intervening as an outsider, made a thoughtful speech with which I profoundly disagreed. It is easier to monitor public expenditure in a disaggregated system than in an aggregated system. If individual outputs are specified, put out to competitive tendering and retendered every three years, it is easier to keep track of what is going on than if it is within one simple aggregated system. I ask the hon. Gentleman to consider the next steps agencies. They set out and publish specific targets for their performance. They report on their performance. There are annual reports, and accounts are presented to Parliament. The accounts are audited by the NAO. The chief executives are accounting officers who are summoned to give evidence before the PAC. That is greater accountability than when it was all lost within one Department. The present system can lead to greater openness, greater transparency and greater value for money.
Finally, I turn to what was the most interesting report, the eighth report on the proper conduct of public business--a highly topical subject. Only seven paragraphs long, the report provides the right focus for the debate about the Government's public sector reforms. The case is sometimes made by our critics that we cannot maintain the ethos and integrity which are traditionally associated with the public service if we somehow contaminate that culture with that of the private sector. It is sometimes argued that the entrepreneurial flair of the competition-driven private sector can have no place in the public sector. I wholly refute that. What we want, and what we can achieve, is the best of both cultures, and I believe that the Public Accounts Committee endorses that approach.
Column 970Paragraph 5 of the report, which was much quoted, says that "there is no reason why a proper concern for the sensible conduct of public business and care for the honest handling of public money should not be combined with effective programmes for promoting economy and efficiency."
Indeed, the Committee goes on to say in the next paragraph: "We believe it is important that the drive to provide improved services at reduced cost should be sustained and that this drive should not be stifled by unnecessary bureaucracy."
That is what the Government have been doing. Improved value for money is at the heart of our programme of reform to strengthen public management. It has involved the next steps executive agencies, the White Paper "Competing for Quality", the citizens charter and the civil service White Paper. The programme is not confined to central Government. In local government, compulsory competitive tendering is providing a powerful stimulus to improve services.
A range of private sector disciplines is being successfully transplanted into the public sector, giving it fresh vigour and testing and improving performance by using competition, franchising and better management information systems.
However--and this is my last word--being more entrepreneurial does not mean, and must not mean, abandoning proper standards of conduct. The Government will not tolerate "wide-boy" practices in public sector bodies, and there is no room for complacency. It is for those reasons that I welcome the reports listed in the motion. Through them, the Committee has reassured hon. Members of the need and justification for the better management of public services, to which the Government are committed. I commend the motion to the House. Resolved,
That this House takes note of the 55th to 63rd Reports of the Committee of Public Accounts of Session 1992-93, of the 1st to 39th and 41st Reports of Session 1993-94, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 2419, Cm 2446, Cm 2492, Cm 2493, Cm 2555, Cm 2577, Cm 2602, Cm 2618 and Cm 2677) with particular reference to the following Reports:
Fifty-seventh, West Midlands Regional Health Authority: Regionally Managed Services Organisation;
Sixty-third, Wessex Regional Health Authority: Regional Information Systems Plan;
Eighth, The Proper Conduct of Public Business;
Sixteenth, The British Council Account, 1992-93;
Seventeenth, Pergau Hydro-Electric Project;
Twenty-third, Development Board for Rural Wales: Allocation and Sale of Housing and Car Leasing Scheme.
Motion made, and Question proposed,
That the draft Legal Aid (Scope) Regulations 1994, which were laid before this House on 5th July, be approved.--[ Mr. Sackville. ]
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With this, it will be convenient to discuss the draft Parental Orders (Human Fertilisation and Embryology) Regulations 1994 and the draft Parental Orders (Human Fertilisation and Embryology) (Scotland) Regulations 1994. 9.7 pm
We are happy to confirm our support for the parental orders regulations. Basically, they provide a fast track for the adoption of children where surrogacy, which is not legally enforceable at present, has been part of the arrangements. The Human Fertilisation and Embryology Act 1990 clearly states that a woman who gives birth is the mother and, while I find this term difficult, the "commissioning couple"--that is, the natural mother and father; the parents who have donated the egg and the sperm--must adopt the child. The Act does not provide for that. The parental orders will speed up the adoption process.
The system of a guardian ad litem being appointed by the court is aimed at ensuring that the Adoption Act 1976 does not cause any difficulties or problems. The legal aid provisions--the only legal aid extension that the Government have provided recently--will assist in that process where there is a challenge.
We welcome the regulations. The issue was debated at length when the Bill was originally before Parliament. I understand that it is a complex issue which has now been settled. I hope that the House will have no hesitation in giving its full support to the regulations so that we can regularise a situation that has been unacceptable for many.
Mr. Michael Jopling (Westmorland and Lonsdale): I am glad to welcome the remarks that the hon. Member for Bristol, South (Ms Primarolo) has made from the Opposition Front Bench. I am also glad to add my good wishes to the Government and to thank them for bringing the matter on.
I think that I ought to say that those of us who have pressed for the matter to be dealt with for a long time have been extraordinarily patient. After all, the Human Fertilisation and Embryology Act 1990 was put on the statute book four years ago. As the Minister knows, I have pressed both him and his predecessor for a long time for the regulations to be produced. I hope that the Minister will say something about why it has taken this unconscionable length of time to bring the regulations before the House. It is not good government practice. The Government ought to be ashamed of themselves for the amount of time that it has taken. I hope that it will not happen again.
Column 972I remind the House of the reasons why the regulations are before us. It stems from an amendment that I suggested to the Human Fertilisation and Embryology Bill, as I recall, on Second Reading and to which I spoke both at that stage and on Report. The House might be interested to be reminded of the circumstances that caused me to become interested in the matter.
One of my constituents and her husband told me their story, which was an extremely sad one. The lady had been born without a uterus, but she ovulated in the normal way. Therefore, taking advantage of modern science, they had some ova taken from her and fertilised with the husband's sperm. The resultant embryo was implanted in a surrogate mother who had agreed to bear the child. No payment was made.
Ultimately, after the normal period--not the period that it seems to take the Government to move from an Act to regulations--the surrogate mother produced two bonny twins, whom I have met. Everyone was delighted. It was a joyous moment. My constituents were presented with the twins by the lady who had borne them. She said, "Look after them well. I have looked after them well for nine months. Take them away with my love and best wishes." That is what they did. The couple returned to Cumbria and attempted to register the children as their own. The registrar said, "I am afraid that will not do. You will have to adopt them." They replied--I shall not repeat the words that I imagine they used--"Don't be so stupid. These are our children genetically. What are you talking about? There is no question of adopting them." Apparently the law said that in those circumstances the children had to be adopted to be taken into the care of their genetic parents. It was at that stage that I came to understand the case and moved changes in the law which ended up as section 30 of the Human Fertilisation and Embryology Act 1990. May I pay tribute to the present Chancellor of the Exchequer, who was extremely helpful and understanding at that time?
Provided the House agrees to the regulations, as I passionately hope that it will, that couple, who are no longer my constituents, will be able to use the arrangements under those regulations. I hope that the Minister will confirm that one has to apply for a parental order, so that one can be deemed the proper parents of children in such a case. As I understand it, the regulations state that that must be done within six months; in the case of children born before the regulations came into play, the parents will also have six months to apply. That will mean that my constituents, whose twins were born five or six years ago now, will be able to apply and to be deemed the parents by the court under a parental order--similar to an adoption order, but crucially different--and that genetic parents will not have to apply to adopt their own children. That seems to be a sensible way out.
With the passing of the regulations, there will be much joy among parents who have the control and care of their genetic children although the mother may not have borne them. If it is passed, it will bring much happiness to a significant number of families.
Column 973Malcolm MacNaughton, professor of paediatrics at the university of Glasgow, I think that the hon. Gentleman can anticipate my concerns. My locus in this matter is that I am one of the lay members of the biological sciences advisory committee at the university of Edinburgh, which is distinguished in the medical field not least in reproductive biology, as the Under-Secretary of State at the Scottish Office knows.
One does not criticise the Clerks of the House or its authorities so, in one sentence, I cannot comprehend how the amendment, which the hon. Member for Birmingham, Edgbaston (Dame J. Knight) moved late at night, got into the Criminal Justice Bill. Some hon. Members who were in Committee dealing with totally different matters were taken completely by surprise. In the circumstances, we did not wish to divide the House because we thought that, in the atmosphere that pervaded it at the time, it would simply result in a humiliating vote, which would injure the cause.
My hon. Friend the Member for Cambridge (Mrs. Campbell) and I interrupted the debate. I asked the hon. Member for Edgbaston a straight question as to whether her proposals would in any way affect research. When we talk about research, we are not talking about things which people do for fun. As the Minister knows, the research is into the very essence of Down's syndrome and other extremely crippling diseases.
What are the reflections and the position of the Department on the issue? How was it that decisions were made before the report of the Human Fertilisation and Embryo Authority? At the very least, one would have thought that the Secretary of State would wait until such time as the very expert organisation which she herself set up and in which there has been general trust had reported and until one had heard what it had to say.
My question tonight, which I think is relevant to these orders, is: what is the latest thinking of the Department on this very delicate and sensitive matter? What can be done to safeguard research into crippling diseases involving foetal tissue which, as I say, is very important and could stop a great deal of human and family misery? 9.20 pm
The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): First, may I thank the hon. Member for Bristol, South (Ms Primarolo) for her good wishes and for the skilful way in which she did my job and described what the Government are proposing tonight?
I must say to the hon. Member for Linlithgow (Mr. Dalyell) that, while the subject that he raises is somewhat outside the scope of the regulations, I am familiar with the point that he is making. The amendment moved by my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) was not intended to ban research, and she has made that clear. The fact that it was passed is a matter for the will of the House on a free vote.
Mr. Dalyell rose --
Column 974I pay tribute to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who described his interest in commissioning couples and how he became interested in that subject. It was due to my right hon. Friend's impetus that the Human Fertilisation and Embryology Act 1990 was amended so that the interests of couples who had commissioned a surrogate birth were taken into account, and the mechanism has been proposed under the regulations for them to achieve parental rights with a much simpler system than a full adoption.
My right hon. Friend pointed out the time that has elapsed. It is regrettable, and it is the product of matters being considerably more complex than they first appeared. They have involved not only consultation between Departments on very delicate points of law, but consultation with outside bodies. A mixture of those procedural matters and some complicated policy decisions over matters to do with the guardian and curator ad litem have meant that it has taken longer than we would wish to bring the orders forward.
I say to those couples who been waiting for these regulations that I am aware of the anguish that they must have suffered during this time of anticipation and expectation. I hope that we see shall the regulations go through the House. They are also, I understand, to be discussed in another place tonight, and I very much hope that they will soon become law so that we shall have a system by which those couples can achieve the parental rights that they have so long sought.
Mr. Dalyell rose --
Mr. Sackville indicated dissent .
Question put and agreed to.
That the draft Legal Aid (Scope) Regulations 1994, which were laid before this House on 5th July, be approved.
That the draft Parental Orders (Human Fertilisation and Embryology) Regulations 1994, which were laid before this House on 5th July, be approved.--[ Mr. Bates. ]
That the draft Parental Orders (Human Fertilisation and Embryology) (Scotland) Regulations 1994, which were laid before this House on 11th July, be approved.--[ Mr. Bates. ]
That Sir Anthony Grant be discharged from the Select Committee on Broadcasting and Mr. David Amess be added to the Committee.--[ Mr. Bates, on behalf of the Committee of Selection. ]
That Mr. John Watts be discharged from the Liaison Committee and Sir Thomas Arnold be added to the Committee.-- [Mr. Bates, on behalf of the Committee of Selection. ]
Mr. Dalyell: On a point of order, Mr. Deputy Speaker. I should just like to register the fact that I think it unfortunate that a Minister would not answer a question politely put to him at 9.25 pm, when we were not exactly short of time. I can well understand it when Ministers are winding up and have a great deal to say in a short time;