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18 Jan 2000 : Column 750

Government Running Costs

Mr. Deputy Speaker (Mr. Michael J. Martin): Madam Speaker has selected the amendment in the name of the Prime Minister.

7.16 pm

Mr. Andrew Lansley (South Cambridgeshire): I beg to move,

This debate, and the one that preceded it, are two sides of the same coin. Nearly 1,000 days into this Labour Government, the public's experience of the health service, schools, transport and crime tells them that Labour is failing to live up to its election promises. They know that Labour is putting up taxes by stealth--£40 billion of extra taxes--and they are told that billions are going into health and education. Yet they know also that money is not reaching front-line services.

In my constituency, Addenbrookes hospital--a world- class hospital--is budgeting this year for a £2.5 million deficit, its first-ever such deficit. In recent weeks, it has on four occasions had to transfer intensive care patients elsewhere--something it has had to do only once before.

Vital as it is to increase the resources for health and other key public services, the responsibility that goes with it, placed upon Government, is to ensure that taxpayers' money is spent effectively. The public want to know where the money is going.

One key part of the answer is that billions are going to meet the costs of Labour's failure to reform and reduce welfare spending. The Prime Minister said:

of national income--

    "we spend on welfare bills of social failure."

Yet the increase in social security spending will be more than £30 billion by the end of the Parliament. That, however, is not the whole story.

Mr. Andrew Miller (Ellesmere Port and Neston): The hon. Gentleman referred to the "reform" of welfare spending. Is he acknowledging, therefore, that welfare spending needed reforming?

Mr. Lansley: Welfare spending needs to get away from the Government's approach of spending more while failing to reduce welfare budgets, and to get away from the means-testing proposals. We need a genuine reform of welfare spending that will enable more resources to be delivered to front-line public services. That is what the public are looking for.

However, as I said, that is not the whole story. Where else is the money going? It is going into the cost of running central Government itself. Whitehall saw Labour coming, and big government is back. The figures are startling. The Conservatives cut the number of civil servants by nearly a third. Since the election, that reduction has virtually stopped.

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The last Conservative Government introduced management information systems, tough running cost limits and measures to relate activity and outputs to resources and their deployment. By comparison, under Labour, we have the much vaunted public service agreements, which are geared less to the value for money of spending and more to Treasury micro-management of public services according to Labour's political objectives--even extending to setting the priorities of local government.

The last Conservative Government had a grip on the cost of administering central Government itself. That is something that the public have a right to expect. At the last election, I met plenty of voters who wanted to see more resources for health, education and the police. However, I met none who wanted to see the Government spend more on administration.

Mr. Malcolm Bruce (Gordon): If the Conservative Government had a grip on government costs, could the hon. Gentleman explain why, in the last two years of that Government, the national debt doubled?

Mr. Lansley: The hon. Gentleman knows that that Conservative Administration were rapidly reducing Government debt--[Interruption.] In the last two years--that is what the hon. Member for Gordon (Mr. Bruce) is asking. In the last five years of that Conservative Administration, we saw a 10 per cent. reduction in real terms in Government running costs. In the five years before the 1997-98 financial year, that was the record of the Conservative Administration.

What has happened under Labour, by contrast with that 10 per cent. real terms reduction? The last published spending plans before May 1997 said that, compared with 1997-98, the running costs of Departments would be reduced by £223 million in the subsequent year and, in 1999-2000, would be £114 million lower than the base year. The Government's latest figures show that the cost of administration of Departments last year was £867 million higher than the preceding year and this year will be £1,104 million higher than the base year. Compared with previous plans, therefore, Labour has not delivered the planned savings, and it has also lost its grip and let spending on running the Government rise sharply.

The result is that in the space of two years £2,300 million more has been spent on administration than was set out in the plans this Government inherited. That is an enormous sum that could buy much front-line activity. Given the debate that we have just had, it is instructive to note that the sum is more than half the annual cost of general practitioners in the NHS; it is more than is spent in a year on children's personal social services; and it is one third more than this year's total capital spending in the NHS. I recall that Labour's so-called early pledge to cut waiting lists by 100,000 was to be achieved by cutting administration costs by £100 million, but if Labour has spent £2,300 million more on administration, that is a compelling reason why it is failing to deliver.

Department by Department the story is the same. For the Department of Health, we achieved a £93 million reduction in total running costs for the four years before the election, but that has been followed in the subsequent two years by a £38 million increase. At the Department

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for Education and Employment, we achieved a £95 million reduction in the three years before the election, which has been followed by a £36 million increase in the past two years. For the Department of Trade and Industry, spending was down by £82 million in the two years before the election but has gone up by £55 million in the two years since.

The cost and waste does not stop at departmental running costs. Scattered through the Government's spending plans are their slush funds, the so-called unallocated provision, which adds up to £173 million. It adds insult to injury for the taxpayer to have to pay more in taxes only for the money to be wasted or squandered on Labour's machinery of spin and disinformation. The public want more doctors and fewer spin doctors, and that is what the Conservative party will offer.

To Labour, facts do not speak for themselves. Indeed, it believes that facts should not speak at all. Interpretation is all, and facts are secondary. Lack of accountability is the easy Labour way out of answering for the Government's lack of policy achievement. They spin their way out of problems, thanks to the growing phalanx of taxpayer-funded political advisers.

In the summer last year, we had the absurdity of Labour's annual report, in which dozens of manifesto pledges were counted as realised because the Government had published some document or announced some future target. For Labour, activity is a substitute for achievement. Its response to criticism is to blame public servants, as we saw last summer. Labour wants to make the civil service, not Ministers, accountable for the results of its policies.

I applaud the Neill committee's vigilance in following up the Government's evident desire to make political compliance the key to career advancement inside the civil service. The Neill committee last week recommended that the performance measurement of permanent heads of Departments

That is right, but as a former civil servant myself, I find it profoundly depressing that the qualities and values of civil servants, who are often highly able and dedicated to public service, are at risk of being undermined by the pressure for political correctness and compliance demanded by Labour Ministers and their paid political advisers.

The growth of direct political interference in the provision of policy advice to Ministers is among the greatest dangers. On that, we can see clearly that big Government means worse Government.

Mr. Brian White (Milton Keynes, North-East): Is the hon. Gentleman apologising for the actions of the Tory Government in the early 1980s, post-Rayner, when political allegiance to monetarism was the key to promotion, not ability? Many people left rather than subscribe to that view.

Mr. Lansley: The hon. Gentleman was a civil servant himself at that time, as was I. His experience may have been different, but my experience at the Department of Trade and Industry was that there was no such basis for advancement in the civil service. I worked for Lord Tebbit of Chingford, who may have politicised me, but he did not politicise the civil servants with whom he worked.

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Indeed, many people from that Department will vouch for the fact that he took impartial policy advice and never confused his responsibility as a party politician with his responsibility as a Minister.

The Labour party has virtually doubled the number of special advisers. The pay bill has more than doubled. At 10 Downing street, there are now 25 politically appointed special advisers, but the former Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major), had eight.

The Neill committee has made welcome proposals about the future scrutiny and numbers of advisers. Of immediate concern to us, however, is the malign influence that those advisers are having on Government and the body politic. They are not discreet advisers. They see themselves as extensions of their Ministers. They brief against each other as much as against us. They have briefed against civil servants, who cannot answer in kind. They speak at party meetings. They take key advisory posts, such as chief press spokesman or chief economic adviser, formerly held by permanent civil servants. They have made more than 170 overseas visits. They see themselves as plenipotentiaries for their Ministers and insert themselves into the chain of ministerial decision making, superior to, rather than complementary to, the impartial sources of advice on which Ministers should rely.

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