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Mr. Robin Squire: I shall not interrupt the hon. Gentleman persistently, but I hope he will address the question why, should the contract go to the private sector, any contractor would wish to overlook its main asset, which would be the quality of the staff at Darlington.
Mr. Milburn: There is no argument about the quality of the staff or the expertise of the people who work at the agency in Darlington, but it is clear from the names of companies that have expressed an interest and been invited to bid that many are large financial institutions. They may well take the view that it would be cheaper, if not beneficial, to move work away from Darlington. That is our concern.
Darlington borough council has estimated that, if 400 posts were lost, an 8 per cent. increase in unemployment would be generated, in a district that already has more people out of work than anywhere else in County Durham. Darlington simply cannot afford to lose the high-quality employment that the agency offers. The agency is a key employer, which is valued by the whole community.
Ministers say--we have heard it again this evening-- that all six firms that have been invited to bid have said that they will retain their core administration in the town. That should come as no surprise to anyone. What else could they be expected to say, particularly at this stage in the bidding process? Naturally they want to send out the right noises, because they want to win the contract.
In any case, as we have already heard this evening,
"core administration" does not amount to a guarantee that work will not be relocated away from Darlington. The Minister has confirmed that the Department has not made it a condition of bidding that such guarantees are given by each of the six firms. The Minister cannot have it both ways: he cannot say that all the private companies that are bidding are giving guarantees, and then be unable to define what those guarantees mean. But that is what has happened this evening.
It is not surprising that staff at the agency feel deeply despondent about how they have been treated. After all, the Teachers Pensions Agency, in providing a high-quality service for 1.3 million teachers and more than 3,000 employers, has met all the key performance targets that Ministers set for it.
My hon. Friend the Member for Walton outlined some of the targets that the TPA has succeeded not just in meeting but in surpassing in the past few years. He did not mention, however, that the accuracy performance of the agency's staff has now exceeded the 95 per cent. target set for them by Ministers. It is now at 96.8 per cent. That has been achieved against a background in which the number of establishments being dealt with by the TPA has risen dramatically by 42 per cent. during the past year or so.
On anyone's calculations, those are substantial achievements. They have been made by a dedicated and hard-working staff, who have made efficiency savings of 5 per cent. per annum. Obviously, they accept that further improvements can be made in the future, and they are committed to making those improvements if they are given the opportunity. The crucial issue is whether they will be given that opportunity. Their good performance, however, has counted for nothing against the absolute determination of Ministers to force through the privatisation of an agency that seems, in their minds, almost too successful to belong in the public sector. Let us consider the evidence. When it was established as an executive agency in April 1992, staff received an absolute assurance from the then junior Education Minister, my predecessor, Michael Fallon, that there was no intention of moving the agency out of the public sector.
Mr. David Jamieson (Plymouth, Devonport):
A broken promise.
Mr. Milburn:
My hon. Friend is right--three years on, and another Government promise has bitten the dust and gone the way of so many before it.
The KPMG report, on which this order is ultimately based, argued for the privatisation approach, but did not even consider the status quo as an option. Thankfully, others took a different, more measured and considered view.
As my hon. Friend the Member for Walton said, the result of the public consultation exercise undertaken by the Department revealed that only three organisations or individuals backed privatisation. However, my hon. Friend did not say that one of those was a potential contractor, which is hardly a ringing objective endorsement of the Government's proposal to hand over the agency's work to the private sector.
By contrast, the 107 organisations that expressed a preference opposed privatisation. Included in the 107 were four petitions, containing 911 names. I should have thought that a vote of 1,000 to three--or 1,000 to two, if one discounts the vested interest--was a clear verdict. I should have expected a reasonable Minister to listen to it, not least because it reflects the views of the agency's customers.
The Minister was right to remind us that the agency's customers are also taxpayers. They are teachers, employers, schools and local education authorities, and they too have an interest in ensuring the running of a well-ordered, well-administered scheme.
Once the consultation had ended, I would have hoped that a Government who were genuinely committed to consultation, prepared to listen and to put common sense above political dogma, would take stock. I would have hoped that the Government would at least pause for thought. Instead, they decided to push ahead with the privatisation exercise, because they dismissed the results of their own consultation exercise.
According to the Department's response, the Government dismissed the views of those consulted on the ground that
The agency's customers are not the only ones on the record as opposing privatisation. The Minister appears to have a short memory, because, as my hon. Friend the Member for Walton reminded him, just five years ago, in 1990, the Department's next steps feasibility study also concluded against the contractorisation option. We are confronted by an unholy alliance of former members of the Government's Front Bench, teachers, local education authorities and employers who are united against this proposal.
My hon. Friend the Member for Walton asked the Minister what has changed in the past five years, but he received no answer. The answer is simple: in 1995, the lurch to the right by the Government has jettisoned all talk of consensus. The opinion of agency staff, teachers, employers and even that of former Ministers has been jettisoned in the headlong rush towards privatisation. In the Government's mind, there is a simple equation that brooks no opposition: public is bad, private is good--"two legs bad, four legs good".
The triumph of right-wing dogma is being taken to excess in the way in which the privatisation of the agency is being handled. Not only are six companies being invited to bid to run the TSS, in the teeth of considered opposition, but they are being invited to help frame the terms on which they bid.
The Minister has seen a copy of a memo sent to all the staff at the Teachers Pensions Agency in Darlington by P. F. Owen, a senior official in his Department. He explained how the Department is now progressing with the bid process. He said:
I would be delighted to give way to the Minister if he could tell me why on earth those six contractors, who threaten to steal work from civil servants at the agency, are being allowed to shape the very terms of the contract for which they will bid.
Mr. Robin Squire:
I will ignore some of the emotive words that the hon. Gentleman has used, because they do not assist the debate. The answer is that, not least in order to clarify and to avoid any area of doubt, it seemed an excellent idea that the consultation exercise should involve not just the staff but putative tenderers. The Secretary of State retains the final decision on the form and content of the contract. That is clear and unarguable.
Mr. Milburn:
Does not the Minister accept that the process of involving the six firms that are prospectively
"Their objections to contractorisation are not well founded."
The real conclusion to be drawn from this farce is not that the consultees were ignorant, as the departmental document seems to suggest, but that the consultation exercise was a sham from start to finish.
"We shall shortly invite the representatives, teachers and their employers to comment on a draft statement of the services that any contractor would have to provide administering the scheme."
So far so good.
"Similar invitations will go to the staff of the TPA"--
an excellent idea--
"to staff in other parts of the department who have been involved in drafting sections of the text"--
that seems sensible--
"to the trade union side"--
and finally--
"to the six companies that we are inviting to tender."
In other words, those six firms are to be given the not inconsiderable advantage of shaping the yardstick against which their bids will be judged. They are having their cake and eating it.
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