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Baroness Chalker of Wallasey: My Lords, the noble Lord's Question was about the Diplomatic Service. I would say to the noble Lord, who has long experience in Civil Service matters, that it is quite right that the Government should consult widely on the White Paper. Indeed it is quite right that the Foreign and Commonwealth Office is undertaking a wide-ranging and thorough review of the senior management structures, evaluating every senior post. This review will consider similar scope for de-layering for the Foreign Office as has been found possible in other areas. But I do not think we should rush this exercise when it is of such importance to so many people in our excellent Civil Service.

Lord Campbell of Croy: My Lords, is my noble friend aware that open competition and transfers for limited periods are not easy to arrange for the Diplomatic Service because members of it at the beginning have to sign that they will be prepared to be sent anywhere, usually to insalubrious places, and their wives and families have to be prepared for that? As regards the Civil Service or industry, wives are often teaching at local schools or carrying on other careers of

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their own. After the Plowden and Fulton Reports cross-fertilisation was tried and has been successful, but it is limited by the factors which I have just described.

Baroness Chalker of Wallasey: My Lords, my noble friend is absolutely right, but we welcome the opportunity to have members of industry serving both in the Diplomatic Service and indeed in the Civil Service as a whole. We also welcome the exchanges that are taking place between the diplomatic services of member countries in the European Community. However, my noble friend is absolutely right in saying that, because the Diplomatic Service needs to recruit and retain people who are willing to be sent anywhere in the world at short notice, we have more difficulties in such recruitment, but I am glad to say that the applications always far exceed the number of places that we have.

Lord Richard: My Lords, I wonder whether the Minister can help us a little more. I do not say this in any spirit of criticism--not great criticism anyway--of the Government's position, but I do not quite understand what is happening. The Government produced a White Paper on the Civil Service and presumably took quite a lot of time to think about it before doing so. They state in that document:

    "The Secretary of State for Foreign and Commonwealth Affairs will be putting parallel action in hand".

t does not state that he is considering action, but that he will,

    "be putting parallel action in hand to cover the areas considered in the White Paper".

re we to be told what the parallel action is? Are we to have another White Paper dealing with the position of the Diplomatic Service? Will a statement be made? How will it be done?

Baroness Chalker of Wallasey: My Lords, I thought that I made clear in answer to the noble Lord, Lord Allen of Abbeydale, that we are already undertaking the review of the senior management structures, and also of grading arrangements and the machinery required for pay delegation, and preparing an efficiency plan. The Foreign and Commonwealth Office administration will take on responsibility for pay and grading from 1st April 1996, and we are exploring ways of bringing the Diplomatic Service and the Home Civil Service staff onto a similar footing and of improving career opportunities both for the fast stream and the main stream. I mention the Home Civil Service because I think it is important that we also have exchanges between the Diplomatic Service and the Home Civil Service where that will work. Many Home civil servants go and do most valuable work for us in our posts abroad. There may not be another White Paper, but I would say to the noble Lord that we are clear that we must continue our rigorous inspection system and that we must stand by our staff who, as my noble friend Lord Campbell of Croy said just now, have a difficult job to do in some of the posts in the world to which we send them.

Baroness Rawlings: My Lords, how is the Diplomatic Service responding to change in the

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international situation, especially with regard to the ex Soviet Union and especially with regard to the need to hold down public spending?

Baroness Chalker of Wallasey: My Lords, my noble friend is quite right to ask this question. The Foreign and Commonwealth Office has made considerable progress as regards doing more for less. We have achieved greater efficiency through our rigorous inspection system. The objective is to redeploy resources to frontline diplomatic work while at the same time holding down our running costs. By doing this we have been enabled to open 21 new posts since 1990, nine of which are in the former Soviet Union.

Lord Bridges: My Lords, does the noble Baroness agree that in introducing into the Diplomatic Service the changes outlined in the White Paper of last July we are not dealing with simple and minor administrative changes but with issues of some constitutional importance, such as the selection of ambassadors for the most senior posts, the professional competence of such people and their political neutrality? Does she also agree that we should pay heed to the example of the United States, where political patronage has operated extensively, to the great disadvantage of the efficiency of the United States foreign service, and that we should be very careful to avoid such a situation arising in this country?

Baroness Chalker of Wallasey: My Lords, I certainly agree with the noble Lord that this is not a simple matter and that the appointment of senior diplomats is of major importance. I believe that we do have a politically neutral Diplomatic Service and Home Civil Service, and so they should remain. These are matters which are very much in our minds in conducting the review.

European Union: Financial Arrangements

3 p.m.

Lord Benson asked Her Majesty's Government:

    Having regard to the statement in the Queen's Speech on 16th November 1994 that they will promote budgetary discipline in the European Union and combat fraud, what proposals they will initiate to achieve that purpose.

Lord Henley: My Lords, the United Kingdom has been in the lead in pressing for improvements to the Community's financial arrangements. We secured important improvements in the Treaty on European Union. At the recent Anglo-French summit at Chartres the Prime Minister suggested a number of areas where the Community needs to improve its performance in dealing with fraud. I expect him to pursue these at the European Council in Essen next month.

Lord Benson: My Lords, does the noble Lord believe that this difficult subject could be approached by a three-pronged attack? First, it should be recognised openly that the Commission is not in a position to prevent those financial misdemeanours which take place

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throughout the Community, and particularly in the member states. Secondly, for that reason, does he agree that what is needed is a comprehensive reform of the whole of the financial administration of the Community which embraces not only the Commission but also the member states, as a single exercise? Thirdly, so far as I know the only institution in the Community which could set that in hand is the European Council of Ministers, which will have to undertake a great deal of painstaking inquiry and will need a great deal of independent professional advice. Has the noble Lord any other workable solution in mind?

Lord Henley: My Lords, I suspect that Question Time is not the time for me to answer in great detail the various points that the noble Lord makes, because I would use up not only the remaining 12 minutes available to the House for Question Time but a great deal more time thereafter. The noble Lord makes some very interesting suggestions. Perhaps I may take the first one, in which I suspect that he was suggesting an increase in the Commission's own extra powers. Obviously that is a matter which could be considered as part of the attack on fraud, but member states themselves would have to recognise that in so doing they would have to expect much greater intrusion into their own affairs. I am not sure whether that would be acceptable to all member states.

All that I can say to the noble Lord is, I repeat that the United Kingdom Government are absolutely committed to the fight against fraud and to good financial management within the Community. We shall continue to fight through the Council of Ministers and through other means for such improvements. We are beginning to see some improvements. But as the House's own Select Committee made quite clear, any such improvements are very much a long-term policy and would take quite a long time to bear fruit.

Lord Bruce of Donington: My Lords, the noble Lord has spoken of the efforts made by Her Majesty's Government in this respect at the level of the Council of Ministers. Is he aware that at approximately 25 minutes past 5 o'clock yesterday Mr. Norman Lamont, the former Chancellor of the Exchequer, gave his account of what happens when matters are raised? I quote from what he said.

Noble Lords: Order! Paraphrase!

Lord Bruce of Donington: My Lords, he is an ex-Minister. However, in effect, he said that he opened the discussion. A large number of Ministers did not turn up. Some of those who did turn up read newspapers. For some reason or other, Mr. Delors intervened in Council to reprove Mr. Lamont for having raised a political matter at the Council of Ministers. Thereafter the discussion terminated.

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In those circumstances, is it wise for Her Majesty's Government to agree, and to insist through another place, that an extra £18 billion be paid over the next six years into Community funds when the Community is quite incapable of controlling its expenditure properly?

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