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Mr. Kevin McNamara (Kingston upon Hull, North): I thought that the kernel of the speech by my hon. Friend the Member for Hartlepool (Mr. Mandelson) was the management of Government finance. Does the Minister intend to address that topic, bearing in mind the fact that various reports by the Public Accounts Committee, the Select Committee on Defence and the Select Committee on Treasury and Civil Service have dealt with the whole issue of costing and control of finance? They have also commented on how the Treasury will deal with it if we lose a complete layer of management. For example, how are we to deal with the burgeoning costs of the Ministry of Defence?

Mr. Hughes: After that uncalled-for intervention, I shall have time to reply to slightly less of the speech by the hon. Member for Hartlepool. I was seeking to speak to those points, but the hon. Member for Hartlepool went wider and I am entitled to respond to the wider issues as well.

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It is quite wrong to associate a reduction in civil service jobs with redundancies. One does not necessarily follow the other. As the White Paper went on to explain:

"The Government's aim has been, and will continue to be, that reductions in the size of the Civil Service should as far as possible be achieved without redundancies. Normal turnover in a large organisation gives managers scope for this. In recent years about 5 per cent. of staff have been leaving the Civil Service each year and in the Civil Service, as elsewhere, this figure may rise as the labour market changes."

The Government's aim is borne out by the facts. Provisional figures for the financial year 1993-94 show a total of about 37,000 departures from the civil service, of which only 2,800 were redundancies, and 800 of those were voluntary. In addition, there were 3,100 early departures, and in some cases that avoided later compulsory redundancies. Therefore, when discussing redundancy in the civil service, we must be sure to keep things in perspective. The hon. Member for Hartlepool made a specific and important point about pensions. Those made compulsorily redundant receive payments under the principal civil service pension scheme related to age, reckonable service and pensionable pay. Terms agreed with the civil service unions when present arrangements were introduced on 1 April 1987 remain in place. I understand that those terms compare favourably with those in the private sector and are on the same basis for all grades. Of course, people are right to be concerned, but I do not think that there is a basis for that concern.

I shall now refer specifically to the Treasury's fundamental expenditure review. I am quite astonished that that review could lead either to this debate or to the cuttings that I have read from newspapers. First, no decisions have yet been made. The fundamental expenditure review did no more than recommend that 31 senior posts should be cut. Two of them are to transfer to other Departments and another three are currently unoccupied. It is surprising that the possibility of 26 redundancies should cause headlines claiming that 100,000 jobs are to be cut and that it should lead to this debate and its tone.

The White Paper stated:

"Every effort will be made to ensure that civil servants will be treated in a way that is fair and reasonable."

I shall reply specifically to the scurrilous points made by the hon. Member for Hartlepool about redundancy on political grounds. Of course, that is not correct; it has never been like that. He also asked whether there would be a hit list. That is an outrageous suggestion, which I emphatically reject.

The Government recognise the value of their staff and they reaffirmed that in the "Continuity and Change" White Paper, which said:

"The Civil Service needs to make better use of its most important resource- -the staff of departments and agencies--by providing the prospects of a career with a good employer, offering challenge and reward; by developing their skills to meet the managerial, technical and competitive challenges they face; and by ensuring equality of opportunity for all members of staff, irrespective of background, gender, race and disability."

The Government will not idly throw away staff who have been recruited and trained at expense to the public purse because we appreciate the value of a permanent, well-trained civil service.

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It is nonsense for the hon. Gentleman--the point was repeated by the hon. Member for Kingston upon Hull, North (Mr. McNamara)--to talk in terms of the emasculation or destruction of the civil service as we know it. An emasculated and incapable civil service would be of no use to any Government, let alone an incoming Labour Government or, as is more likely, a continuing Conservative Government. Any wise Minister values the advice that he gets from his officials and, more to the point, knows that its quality is dependent on the robustness and impartiality with which it is delivered.

Good government in this country depends on a good and strong civil service, and the Government acknowledged that in the White Paper, which says:

"Successive Governments have paid tribute to the service it has provided and have taken care that the Civil Service should maintain its impartiality and its ability to command the confidence of successive administrations. This Government are fully committed to maintaining this approach."

The idea that somehow, either in quality, in its disposition or in the numbers, the civil service would not be able to help or be of value to an incoming Labour Government is, in my judgment, a slur upon the civil servants who are there at the moment.

The exaggerated media stories and spurious figures on redundancies in the civil service that have been repeated tonight are inaccurate and, as I hope I have shown, will not help in the management of what is a difficult period of change for the civil service.

When the hon. Gentleman talks about demotivation and suggests that the Government have a desire to shred the civil service, what effect does he think that has on civil servants and their families? If anybody is demotivating those people, it is people such as the hon. Gentleman.

Mr. McNamara: Market testing.

Mr. Hughes: Market testing is enabling civil servants to do the jobs that they want to do; it is getting good value for the taxpayer. I know that the hon. Gentleman does not care about that; he does not care whether the customers--the people paying the bill--get the service that they want, but what can be the argument against people getting the best quality service at the best possible price? I thought that nobody would argue with that, least of all what we keep being told is the modern Labour party, the new Labour party that believes in value for money. That idea is blown out of the water every time Labour spokesmen open their mouths.

I believe that what has been said tonight will not help in the management of what is a difficult period of change for the civil service. The Government know well the excellent service that the civil service has provided to the country over many years and are determined to maintain an apolitical permanent civil service that is honest, impartial and accountable through Ministers to Parliament. Those qualities have served us well in the past and will do so in future.

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The Government are also determined to have a civil service that is effective and efficient. There is simply no reason to maintain within the civil service jobs that can be best done in the private sector. Let me remind the House that our criteria are best long- term value for money. We are seeking to safeguard services for the future, not to contract them out to the lowest bidder.

Alongside our determination for efficiency is an equal determination for quality of service. The citizens charter programme is a 10-year programme designed to raise the quality of public service across the board--and that includes the civil service.

Mr. Mandelson: Does the Minister accept that the fears of the Opposition might be greatly allayed if he were to take up my suggestion that the permanent secretary to the Treasury should call on the shadow Chancellor and reassure the Opposition that the Treasury machine that he is leaving intact, as the Minister has described, will be capable of implementing the policies and programmes of an incoming Labour Government? Why does not he accept my suggestion?

Mr. Hughes: Any reading of chapter four of the "Civil Service Management Code", which is a published document, not unwritten rules, would make the capability of the civil service abundantly clear to any sensible person from any party. That code covers the duty not to misuse official information, political neutrality, conflicts of interest, duties of civil servants in relation to Ministers and rules on accepting employment after leaving. The essential rules for being a civil servant are laid down centrally. They have everything to do with the hon. Gentleman's question. Those are the important issues for the Government to consider, not some fanciful idea of what an incoming Labour Government might or might not want to do. The reorganisation of a management structure as large and as complex as the civil service is bound to be unsettling for those involved. We shall seek to keep redundancies, particularly compulsory ones, to a minimum. It is in no one's interests that there should be more than are necessary. It must be our aim to limit the number of redundancies as far as possible, in the interests not only of good personnel management, but of good economic management.

The Government now demand and get from the civil service better efficiency and better quality. For instance, the Benefits Agency has estimated that its productivity increase in the past four years means that it is now coping with a work load that would have required 15, 000 more people in 1990. Demanding and getting value for money, looking for efficiencies and making the savings that are necessary are part of the duty of the Government to the taxpayer. I do not think that anyone would seriously argue about that duty and I do not believe that the Opposition will be taken seriously if they seek to do that.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Eleven o'clock.

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