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My hon. Friend the Member for Pendle (Mr. Prentice) referred to the fact that the previous occupant of the position had never met the Prime Minister. I am happy to tell the House, in the spirit in which I believe we should act, that the Prime Minister has scheduled a
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meeting tomorrow with the new chair and the outgoing interim chair, Rita Donaghy. I am sure that Members will welcome that commitment.

My hon. Friend and my hon. Friend the Member for Ashton-under-Lyne (David Heyes) referred to funding for the Committee on Standards in Public Life. I should like to make it clear that the committee’s budget has not been cut by 40 per cent., as was suggested. In fact, in evidence to the PAC in April 2006, Sir Alistair Graham said that the Committee had not faced any cuts, but had received the budget it sought. I have the figures if any Members want reassurance about the situation.

As I am the Minister with responsibility for civil service legislation, I was glad to hear the comments made in the debate today. The Public Administration Committee made a large number of recommendations in its report and they are directly relevant to the constitutional reform agenda that is being taken forward as part of “The Governance of Britain” Green Paper proposals. The Committee has welcomed the Government’s commitment to bring forward legislation on the civil service. This will be the first legislation of its kind from any Government.

I hope that right hon. and hon. Members will join me in paying tribute to the dedication and skills of those who work in the civil service. During my working day, I meet many civil servants, both in Whitehall and across the country, and I am constantly impressed by their hard work and commitment to public service. I thank them for the work that they do for the people whom we serve.

Simon Hughes: May I push the Minister a little further? Since 1998, it has been announced that a civil service Bill is on its way. We have had a draft Bill, but the Bill was not included in the Government’s draft legislative programme or the Queen’s Speech. What is the timetable for the Bill appearing before Parliament and what is the Government’s expectation of when it will be on the statute book and in force?

Gillian Merron: All good things are worth waiting for. It is important to note that we are the first Government to give this commitment. It will be within this parliamentary Session. The draft provisions to which the hon. Gentleman referred will enshrine in legislation the core principles and values that govern the civil service: impartiality, objectivity, integrity and honesty. I am sure that the House will understand that, at this stage, I cannot comment on specific issues—nor would it be appropriate to do so—but we are taking full account of the recommendations made by the Public Administration Committee in its report, and I am grateful to the Committee.

It is worth noting the action that we have already taken, independently of legislation. In June last year, we issued a new civil service code. It included the right for the civil service commissioners to take a complaint or concern directly from a civil servant about an issue under the code. Furthermore, the selection panels for the most senior civil service appointments are now chaired by the commissioner. The Government make an annual report to Parliament on special adviser numbers, costs and responsibilities. A new ministerial code was published in July and a revised code of conduct for special advisers was published in November.

As I said earlier, we are consulting the main Opposition party leaders on the appointment of the First Civil
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Service Commissioner and the Commissioner for Public Appointments. I am sure that the whole House welcomes the Government’s improvements in that regard. In addition, following a recommendation from the Public Administration Committee, and in line with arrangements for the new chair of the Committee on Standards in Public Life, the appointments of the First Civil Service Commissioner and the Commissioner for Public Appointments have been converted, with the Queen’s agreement, to single fixed terms of five years.

Turning to public bodies and public appointments, the post of Commissioner for Public Appointments was created in 1995 to regulate, monitor and report on ministerial appointments to public bodies. The commissioner publishes a code of practice to ensure that the appointments process is open and transparent, and that appointments are made on merit. We have extended the code beyond the point at which it started. It previously applied only to NHS bodies and executive non-departmental public bodies. The Government have included advisory non-departmental public bodies and public corporations within the commissioner’s jurisdiction. That means—this is important in the context of our earlier debate—that about 10,000 appointments to more than 1,000 public bodies are now regulated by the commissioner.

Those public bodies provide vital services, from health to education to the protection of the environment, and including everything in between. They are created when that is the most efficient and effective way of delivering a service. The majority of those who serve are unpaid. There has been discussion about the number of public bodies. However, the number has fallen. In 1997, there were 861 public bodies sponsored by the Government, excluding those sponsored by the then Scottish, Welsh and Northern Ireland Offices. By 2006, that number had fallen to 835.

There has been reference to the ministerial code. The Government agreed to a strengthening of the rules relating to former Ministers and the business appointments process. I assure the right hon. Member for North-West Hampshire that the new ministerial code makes it clear that on leaving office Ministers must seek advice from the independent Advisory Committee on Business Appointments about any appointments or employment that they wish to take up within two years of leaving office. The code makes it clear that Ministers will be expected to abide by the advice of the committee. Previously, the arrangements were on a voluntary basis. On the new ministerial code, a new independent adviser on Ministers’ interests has been appointed, who can be invited to investigate allegations of wrongdoing. That represents a strengthening.

My hon. Friend the Member for Cannock Chase made a comment about regulators and the need to put them on a statutory footing. It is important to say that the Government are committed to preserving the existence and independence of the various ethical regulators. The Public Administration Committee said that there needs to be further debate on the precise way in which ethical oversight is best arranged. We look forward to working with the Committee and the regulators to find out what further improvements are needed. Each of the ethical regulators is already accountable to Parliament. Their
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annual reports are published and they regularly give evidence to the Public Administration Committee. Again, if further measures are necessary, we will gladly continue to work with the Committee and the regulators on that.

The hon. Member for North Southwark and Bermondsey (Simon Hughes) referred to caps on donations. Just yesterday the Secretary of State for Justice announced in the House that a White Paper would be published as soon as possible, and the Government will introduce legislation after that. That is an issue for all parties, as was brought out in the debate. I hope that we can work together to restore greater confidence in politics and politicians, which is what we all want. The hon. Member for North Southwark and Bermondsey also suggested that special adviser numbers be cut. Perhaps it would help the House if I made it clear that in the ministerial code, there are clear rules on the number of special advisers. Ours was the first Government to publish an annual report on the number and cost of special advisers. Perhaps we could give a bit of calm context to the numbers: the Prime Minister’s statement, published on 22 November, showed that a total of 68 special advisers were in post. That is out of a total of more than 500,000 permanent civil servants.

Greg Clark: Will the Minister say how many special advisers were in post in 1997?

Gillian Merron: I believe that the number of special advisers is already a matter of record; the figure is in the Library.

The hon. Member for North Southwark and Bermondsey also suggested that the Government cut the number of press officers. Again, to give some context, there are 563 registered press officers in central Whitehall Departments. I believe, as many of us do, that it is essential that the Government inform the public effectively. I make no apology for campaigns on issues such as not drinking and driving, quitting smoking and handling national challenges such as foot and mouth—that is, on how to keep people safe in their daily lives.

My hon. Friend the Member for Pendle expressed concern that regulators could perhaps be abolished at the drop of a hat. I simply do not accept that suggestion. I hope that the manner in which I have responded to the debate and our wish to see regulators play a strong role will give him some reassurance.

Mr. Gordon Prentice: The political honours scrutiny committee was abolished at the drop of a hat.

Gillian Merron: We are committed to the existence, independence and effectiveness of the regulators, because they help us to carry out our job. We should see them in that light.

The right hon. Member for North-West Hampshire suggested that the Ministers code was less robust than the MPs’ code. I referred earlier to the improvements that we have made. I wish to add a reassurance that Sir Philip Mawer will publish an annual report covering his work and role. Parliament will want to look at that closely.

The hon. Member for Harwich (Mr. Carswell) spoke of holding the quango state to account. Perhaps I can offer him a reassurance that public bodies and central Government public bodies are ultimately accountable to Ministers. Chief executives are appointed as accounting
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officers. They can be and often are summoned to give evidence before the Public Accounts Committee. Those public bodies are required to have published complaints procedures in place. I have already indicated the downward trend in the number of those bodies. On lobbying, I look forward to the Public Administration Committee’s inquiry into the lobbying industry. We believe that the right approach is for the Government to ensure propriety in their actions and for the lobbying industry to regulate its own conduct.

The hon. Member for Tunbridge Wells (Greg Clark) spoke about party funding. It is worth the House recalling that it was this Government who introduced the Political Parties, Elections and Referendums Act 2000, which took important steps forward by setting up the Electoral Commission and the appointments committee and setting out requirements in respect of donations. The Government must complete that work and we will not hesitate to make any necessary changes.

In conclusion, the Government have never shied away from taking the action necessary to maintain and enhance the standards that the British people have a right to expect from us and which we are proud to deliver. The Public Administration Committee has made a huge contribution over the years to reinforcing and enhancing the principles and practice that guide the way in which holders of public office discharge their duties. The Government look forward to continuing to work with the Committee and the various regulators and to maintaining our commitment in this area.

Question deferred, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates) .

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Department for Work and Pensions

Benefits Simplification

[Relevant documents: Seventh Report of the Work and Pensions Committee, Session 2 006-07, HC 463-I on Benefits Simplification , and the Government’s response, Third Special Report, Session 2006-07, HC 1054; Eighth Report of the Communities and Local Government Committee, Session 2006-07, HC 718, on Local Government Finance: Council Tax Benefit, and the Government’s response, First Special Report, Session 2006-07, HC 1037. ]

Motion made, and Question proposed,

4.42 pm

Mr. Terry Rooney (Bradford, North) (Lab): I welcome my hon. Friend the Minister for Employment and Welfare Reform to the debate. I was expecting the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), but she is far better looking.

Some would say that it was ironic that the Select Committee published a report on benefits simplification that ran to 116 pages and contained no end of jargon, numerous unintelligible tables and various other obstructions to general understanding, but I would not say that.

Why did we undertake the inquiry? Last year the Committee conducted a short inquiry into the efficiency savings programme in the Department for Work and Pensions, and it became apparent to us that part of the problem for the staff was the enormous complexity of the benefits system, which was compounded by the job reductions that were taking place and the IT problems being experienced. That is why we decided to undertake an inquiry into potential benefits simplification.

It is worth pointing out that the Department administers about 40 different benefits. In addition, there are benefits such as child benefit and child tax credit, which are dealt with by HM Revenue and Customs. Many of the benefits administered in the Department are passports to other benefits such as Warm Front grants, eye treatment, dental treatment and so on. In total, the Department’s budget is about £120 billion; excluding state pensions, it is about £70 billion. There are 17 million claimants, and about 25 million people are affected. Obviously, the Department has a major influence and impact on people’s lives.

Furthermore, for about 17 years the Department’s accounts have not been signed off. That used to be because of customer error and customer fraud. However, the Department has been effective in dealing with those problems, and the problem now is increasingly official error. The total loss due to fraud and official error is
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estimated at about £2.6 billion. Although, taken against the overall budget, that is fairly tiny, it is still an exceedingly significant amount. No doubt the level of official error in particular has come about largely because of the complexity of the benefits system that staff have to administer. I do not think that anybody deliberately makes errors, but they are the almost inevitable consequence of where we are.

Throughout the 1980s I was a welfare rights adviser. In those days, we had two bibles. One was the Child Poverty Action Group handbook, which in those days ran to about 250 pages, but now has 1,600 pages. The other was known as the Yellow Book—a single volume containing all the Acts of Parliament and the regulations. That is now the Blue Book, which runs to 32 volumes; the “Decision Makers’ Guide”, the instructions on how to implement the legislation, runs to 14 volumes. That is meant to help, although I do not know whether there are examinations on those 14 volumes.

How did we get to where we are today? To a large extent, social security started with Beveridge; there were things previously, but they were minuscule. Essentially, Beveridge established a system of benefits, based on national insurance contributions, around the principle that men worked and women stayed at home. At that time, it appears that nobody was sick or disabled. For those who fell outside national insurance contributions, there was a fairly brutal system called national assistance.

By the ’60s, society at large had decided that national assistance was not a nice thing and we got supplementary benefit, which gave a series of entitlements but had a lot of discretion within it. By the mid-80s, that discretion was deemed not to be good. It was thought that it was being abused. It was impossible to budget for, so we got the Social Security Act 1986, which introduced income support. That had the benefit of formalising things—everybody knew where they stood—but it created an awful lot of losers. However, that new system came in.

By the mid-90s, it was decided that we needed a new regime for claimants who were seeking work, so we got the jobseeker’s allowance. The old invalidity benefit became incapacity benefit. Those are the main income replacement benefits, but along the way, for various reasons, we got other benefits such as disability living allowance and carer’s allowance. Every time a benefit is brought in, a new layer of legislation and complexity is added, but seldom is anything taken away.

There is also the problem of legacy. It has always been a principle of the social security system that nobody should be a cash loser at the point of change. Some would say that that is equitable and is the right thing to do—but we are now running five separate systems for those incapable of work due to illness or disability. We have legacy claimants from the various different systems going back a long way. That has an administrative cost, because it is cheaper to administer a current benefit than one that is 30 years old. It also puts a serious strain on departmental staff who were there when it happened and know about the rules relative to the benefit that is still in operation. I make no judgment in this debate about efficiency savings, but it is fair to say that when 30,000 staff were taken out of the organisation, an awful lot of them were at the older end of the spectrum and had that knowledge. That creates the further risk of official error.

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Complexity in the benefits system comes from a variety of sources. We are guilty, because this House is one of the worst places for introducing it. Somebody stands up, cites a case and says that something must be done, a campaign starts, and before we know it there is more complexity. That person goes home happy and 2,000 civil servants scratch their heads and say, “Why on earth did we do that?” Public pressure sometimes arises out of topical incidents. Those of us of more mature years remember the 1960s documentary “Cathy Come Home”. People relate that to housing and homelessness, but it also led to wholesale changes in the benefits system, particularly the introduction of rent allowances. Change sometimes happens because it is decided that a budget is running out of control and savings are needed.

As I said, there are about 40 different benefits, which were all created at different levels. It is not the case now, but for many years in the ’80s and ’90s it was touch and go each year whether the rate of the state retirement pension was above or below the level of income support for people over 60. In some years they qualified for income support, or supplementary benefit before that, while in other years they did not—often by only 5p. That was because of the different formulae that applied.

Straightforward policy objectives also have an effect. The one that I would highlight, because it is in the news a lot, is child poverty. The Government’s declared intention to deal with that has led to all sorts of policy initiatives. Things can go spectacularly wrong. I have a couple of examples, although hon. Members will probably have nightmares if I mention them. The first is that of the Child Support Agency. In the late ’80s and early ’90s, it became apparent, particularly to the public, that far too many fathers were abandoning their financial responsibilities and, in effect, leaving them to the taxpayer, because in those days about 1.5 million lone parents were not working and on benefits. The so-called liable relatives division of the old Department of Social Security, which was responsible for collecting maintenance, was always the lowest priority for staffing, and whenever there were staff shortages the people there were moved somewhere else. Frankly, it was useless at collecting maintenance. Court orders gave maintenance only for a fixed amount—there was no facility for the payment to be uprated. If the person failed to pay, it was up to the potential beneficiary to take follow-up action to get the money. The system had collapsed.

There was all-party support in this House for the original legislation, the Child Support Act 1991; I do not think that a single person spoke or voted against it. Closer examination, with the wonderful benefit of hindsight, shows that the formula calculation for the basic maintenance payment ran to three pages—a bit different from E=MC(2). One of the big steps forward, which started with the Jobseekers Act 1995, has meant that Committees reviewing social security legislation now have draft regulations before them. In those days we never did, and it was pot luck whether the intention translated into the regulations. It was a big step forward when Committees actually saw the draft regulations, and that process has improved even more.

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