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Baroness Trumpington: My Lords, I hate to rise, but I remind your Lordships very gently that when the clock indicates nine minutes, we are actually in the tenth minute. We are running slightly behind schedule at the moment.

6.9 p.m.

Lord Bancroft: My Lords, the time limits and the excellent earlier speeches confine me to two propositions. My first is that, so long as we have our parliamentary democracy, the essential role of the Civil Service—though not how that role is discharged—should be unchanging; namely, to act both as a ballast and, if need be, an engine in a constitution which includes a volatile and increasingly powerful Executive, and a volatile and, until very recently, increasingly regimented legislature; a ballast and engine of permanent officers, duly subordinate to Ministers yet possessing sufficient independence, character, ability and experience to be able to advise, assist and to some extent influence those who are from time to time set

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above them. I quote, of course, the timeless verities of the Northcote-Trevelyan Report. Those verities extend from the Permanent Secretary advising the Minister to the youngest clerk in a local office caring for clients beyond the call of duty. On a personal note I relished all the many Ministers I served except one.

In order to perform its role effectively, the service must be self-confident. Something has gone far wrong when too many civil servants are furtive or apologetic about their occupation. Partly as a result of the service's loss of self-confidence, some of our fellow citizens have lost confidence in it.

I simply cannot fathom the Government's refusal to commission an independent attitude survey of its employees. As a result, we all have to rely on anecdotal evidence. Mine is uniformly depressing at all levels. Heaven knows, I am no supporter of navel gazing but anecdotes show deep anxieties. I beg the noble Viscount to come back to us with a more satisfactory response on this point.

As others have remarked, the service is also handicapped by being mucked about too much, too rapidly and too incestuously. We needed a weighty Royal Commission at work some years ago. I am in no way overlooking the Select Committee in another place, which has been admirably persistent. I find myself welcoming most of the words but only some of the proposed actions in the latest White Paper. There is a gap between the words and the actions—the almost total break-up of a unified service into hundreds of semi-autonomous agencies, each under its own chief executive. Some arm's length agencies and indeed quangos—yes; but not hundreds. It makes for a cat's cradle of lines of accountability, rather like the work of a clever idiot trying to map Tom Tiddler's ground. Will the noble Viscount draw that last point to the attention of one or two of his ministerial colleagues?

Will he also be kind enough to mention to the same colleagues that it is distressingly simple minded to seek to separate policy and operational matters? Does he agree that while the acts of conception and birth are separate, they are also intimately linked—at least to the extent that one informs the other. Does he further agree that there is an intimate link between concept (that is, policy) and implementation (that is, operational matters)? Will he confide in us the Government's definitions of "responsibility", "answerability" and "accountability"? The partial attempt in the White Paper, although not unfamiliar to me, falls below the level of acceptability in the new circumstances.

My second proposition is that it is the natural condition of any public service to be corrupt. If that is much less true in this country than in others, it is because for a long time now, but by no means time out of mind, our Civil Service has maintained high standards of probity. That has not come about by accident. High standards have persisted because they became deeply ingrained in the ethos of the service. That ethos was rapidly absorbed by new arrivals, whose very method of recruitment to the service—by open competition—set the tone. They soon learned from their elders what was expected of them. Indeed, until I left Whitehall, I continued to ask myself, "What would

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Bridges (my noble friend's father), Brook or Serpell have done in like circumstances?" The ethos was further safeguarded by the tradition that the service offered a lifetime's career. That is now largely disappearing. It had the merit of building a deep commitment to the service and to its reputation. To become set in one's ways is not an unmitigated evil, if the ways have virtue. Standards are now at risk.

For years I opposed a code of ethics as I saw no need for it. But I now see the need with piercing clarity, given the fragmentation of the service. As a result of this, staff will remain largely unexposed to the ethos, which in the past was taken for granted. So, as a fellow repentant, I welcome the Government's conversion to the need for a code. I welcome too the introduction of independent redress for those who find themselves pressed to depart from those established standards. That is particularly necessary with the disappearance for many of a right of appeal to a long-serving permanent secretary, who is in no doubt about what is properly required of civil servants.

Many of the new agencies will be headed by people who themselves have had little or no previous experience of public service. I surmise that there will be a muddling number of differing categories of civil or public servants in the future. Will the noble Viscount confirm that, despite the apparent muddle, it will be crystal clear to which categories the Civil Service code and Civil Service status will apply in terms of recruitment, conditions of service, pensionability and acceptable post-retirement work —a point touched on by my noble friend Lord Allen?

The Government's proposed code is too general. I believe that after further consultation it should be embodied in legislation. I am glad that the Government have an open mind on that.

Finally, the appointment of the new part-time first commissioner on an initial short contract will be vitally important, given his enlarged responsibilities. Will the noble Viscount be kind enough to provide assurances on two points? First, while of course being subject to ministerial approval, will the selection process be free from any ministerial influence? Secondly, does he agree that it is essential for the new guardian of the Civil Service ethic to have been long marinaded in the public service? The advertisement which I have refers only to experience with company boards or with the public sector. Nowhere in the advertisement is the term "public service" used. That is crucial. It is not a matter of semantics.

Muddle makes for complexity, which in turns breeds mistrust, for what cannot be readily understood is not readily trusted. Simplicity should be the aim. The Government have still to convince us that the latest White Paper will bring the service to the frontier of achieving it; ripe also for reunification, with ethos intact, when the present ministerial fever abates.

What we have witnessed so far is partly a bold leap into the future and partly a disorderly retreat into the unreformed past. Meanwhile, I salute with sympathetic

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admiration those at all levels of the service who continue to serve their country with such devotion and probity.

6.18 p.m.

Lord Croham: My Lords, I too am grateful to my noble friend Lord Allen of Abbeydale, for initiating this debate, and especially for the powerful way in which he opened it. I entirely agree with his remarks. I also welcome the proposals in the White Paper about a code of conduct, for the reasons which the noble Lord, Lord Bancroft, has just given.

In particular, I like the proposal for a final avenue of appeal when doubts about conduct, legality and propriety occur. However, I would not expect that final avenue to be utilised any more frequently than the other avenue of appeal which already exists when improper decisions about spending have been made; namely, the exposure of the impropriety to the Comptroller and Auditor-General and thence to Parliament. That possibility is powerful enough to make it virtually unnecessary to invoke it. I believe that it is a much stronger safeguard in its relevant area than what is now proposed for the rest. It is vital that the new arrangements involving the role of the First Civil Service Commissioner should not be allowed to affect that longstanding safeguard. As regards that role, I myself would have thought it better to have given it to the Parliamentary Commissioner and not to a Civil Service commissioner.

The enhanced role and strengthening of the Civil Service Commission is one of the main features of the White Paper which came out last week. Provided that the person appointed as First Civil Service Commissioner is fully acceptable to all parties in Parliament his inclusion on the Senior Appointments Selection Committee should help to remove the suspicion that there could be party political bias in top appointments.

However, in my experience in the rare cases when Ministers have expressed strong views about candidates for posts, it has been more a question of personalities than about suspected party affiliations or sympathies. It would be a much cleverer Minister than most whom I have known who could detect whether their senior civil servants have any party affiliations.

As regards the commissioner's contribution to senior appointments, if it is to be anything more than a negative one it would be necessary for the commission as a whole to have much more contact with the ongoing work at senior levels in departments than it has had in the past. I do not believe that that would be desirable.

As the noble Lord, Lord Bancroft, pointed out, if the First Civil Service Commissioner is not to be an existing serving senior civil servant, it raises the question of what he will know. It also raises the question, if he is not to be a civil servant, of what the role of the commission itself is to be. Is it to be a special government department or a quango and to what extent will Ministers be able to give it directions? Indeed, what is its range to be if the service is fragmented? We must await more details.

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The main concerns which I have, and which the White Paper does nothing to diminish, are that many recent developments run the danger of fragmenting the service and that its whole ethos will be destroyed. This is a possible consequence of the proposals that central grades should be abolished; that there should be a new pay system for senior civil servants, with a number of overlapping pay ranges, and that organisational structures should be flat though different from department to department. These may be ideas in line with private sector practices and some modern management theories, but such ideas tend to be short-lived.

Just before I retired from the Civil Service I was taken to task by a committee of the other place because the proposals for unified grading which the Fulton Committee had recommended had not been fully implemented. Unified grading was seen as essential to the ease of movement of staff about the service and to the bringing of the professional classes into senior management posts. Shortly after the war a number of posts in intermediate grades were created in order to improve the co-ordination of new tasks. Now unified grading and hierarchies are frowned on.

With good will, most forms of organisation can be made to work but too much variation in pay in a public service usually causes endless problems for assessment and negotiation, and arbitration if that is permitted. It should not be forgotten that the pay of individuals in the public service has always been ascertainable through either the Imperial Calendar or its successor the Civil Service Yearbook and that when differentials are detected they are followed by claims. In those private sector posts where remuneration is public knowledge, as for company chairmen and chief executives, strenuous efforts are made not to have less remuneration than the peer group.

The White Paper also discusses appointments to senior Civil Service posts from outside the service. Such appointments are not new. They have been essential for some professional posts and have at times been very fruitful in general administration. But the proportion of outside appointments and the nature of their contracts has to be watched if key qualities of the Civil Service are to be maintained. I have observed that where in the private sector there is a strong sense of loyalty to the firm there is always an expectation of long-term employment and promotion from within, unless the appropriate talents cannot be found inside. Where firms rely on recruiting staff on strictly short-term contracts there is rarely any sense of belonging to the firm and the idea of loyalty to the firm is laughable. Nor do talented senior people in the private sector accept jobs on genuinely short-term contracts. They demand rolling contracts so that if their services are no longer required they can obtain a payment of two or three years' salary, part of which is tax free. Someone on a short-term contract can be expected to be loyal to the terms of the contract, but that is all.

What I find lacking in the White Paper is any understanding of what it has meant to be a member of the Civil Service or of the factors which have influenced people to remain in public service out of a sense of

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loyalty. A department of state is an institution with a history; it has been developed into a working team and its members are concerned about its standing, its performance and its long-term objectives. Morale is not just a word in a list of worthy qualities; it is a vital element if a department or a service are to be any good. And it has to be supported by leadership. Senior members of departments are not just there to do the job of the moment under contract but believe that their duty is to ensure that the department functions efficiently, effectively and lastingly. That involves the duty of training, developing and encouraging their potential successors. Concern for such things is what distinguishes a service from a mere employment. Excessive fragmentation of the service will result in it being just a collection of employments. Many years ago one of my colleagues asked in an interview about his responsibility, and he said that he considered himself responsible to his concept of what made an ideal civil servant. That is an attitude that strikes a chord with those of us who have served in the British Civil Service, and in your Lordships' House. I do not find that degree of understanding in the drafting of the White Paper.

6.25 p.m.

Baroness Park of Monmouth: My Lords, I have been neither a Minister nor a Permanent Secretary; I almost hesitate to speak. But what I wish to say is atmospheric, reflecting a general but widely-shared fear that we risk destroying a great national asset.

Within the service morale is low and the Civil Service is no longer perceived by young graduates as the natural goal for high flyers. Even in my time undergraduates would say to me, when I asked why they were not sitting the CSSB examinations, that the service had become like Marks & Spencer; it is not a public service anymore so it is more sensible to go into Marks & Spencer and be better paid.

Fortunately, I gather from inquiries in Oxford that, though there remains scepticism about the value of Next Steps, undergraduates are slowly beginning to think that it might be worthwhile to enter in the hope that something may be done to salvage the public service for which they care.

The White Paper says:

    "The Civil Service needs ... to make better use of its most important resource ... by providing the prospect of a career with a good employer, offering challenge and reward".

But what does it do in practice? It takes people whose whole ethos is public service; disinterested, objective, committed to helping to shape national policies—as they did in the crucial years after 1945 about which Peter Hennessey writes so brilliantly in Never Again—and to working together, and it introduces a totally different set of values. Suddenly, in order to succeed civil servants are required to be competitive; to be market tested; to give value for money measured not by quality but by statistics: how many pieces of paper are handled; how many ticks are placed in boxes; how many successful sound bites are produced for citizens charters?

I am not arguing that there is not merit for some, and for some satisfying challenges in the various agencies. But I do oppose the application of this demi-business

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culture to all the operations of the public service and to the judgment and assessment of quality and performance and hence the prospect for advancement by inappropriate and even suspect criteria. It is repeating the mistake made in academic assessment today where someone who publishes six relatively trivial though perfectly respectable articles will be judged to have done better than the serious scholar who takes some years to write a book and produces nothing in the interval.

Throughout the Civil Service, the agencies and the non-departmental public bodies, people are writing endless business plans, market plans, financial audits, budget reviews and strategic plans. There are endless rehearsals of what has been done and what will be done but with no time left to do the central work or to think cohesively and broadly. There are too many buzz-words; too many charters; too much time spent projecting images. As one official put it to the Treasury and Civil Service Committee, they have all been "scrutinised to death".

The Government will say that that is all a necessary radical process from which a slimmer, meaner and altogether more satisfactory Civil Service will emerge. Statistically, that may be so. But what will the qualities of the staff be? Who will want to enter a service where there is deep insecurity? The young today are accustomed to being mobile in the City. They understand that to reach the top in the public service and secure really good jobs requires experience and commitment. What are they to make of a system under which, if an outsider wins an agency chief's job, he or she can expect whatever the market dictates, but a career civil servant can expect only his or her existing salary?

Civil Service pay has never been high and is now well behind the market. Civil servants must perceive themselves not to be valued. If the best leave, where will the successors to the present senior civil servants come from? The Government are devaluing their best asset—a highly motivated and dedicated body of people in a long and honourable tradition. To some extent that springs from a mistaken perception of Oxbridge elitism among the so-called mandarins. But as the then Secretary of State rightly pointed out to the committee, Oxbridge today is very broadly based and the perception of social bias in the Oxbridge intake is wholly unfounded. Incidentally, those who regard it as ridiculous to take someone with a degree in philosophy overlook, as the Treasury does not, that they have the best possible training for the higher reaches of information technology and artificial intelligence.

Far from pushing their reorganisation further, I hope very much that the Government will pause and consider urgently how best to motivate existing members of the service to stay. Unilever and ICI promote from within to managerial and boardroom status. Why not the Civil Service? I have always wished that we had the equivalent of ENA—the Ecole Nationale d'Administration—in this country. It gives the valuable exposure to other experience but it also reinforces pride in being one of the elite—a civil servant. The Government should be thinking how to restore the public perception of the Civil Service, which it has

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become the fashion to denigrate, as a splendid career and civil servants as people who are valued, trusted and needed.

6.30 p.m.

Lord Hunt of Tanworth: My Lords, I, too, congratulate my noble friend Lord Allen on arranging this debate and also those concerned for the impeccable timing of it in relation to the White Paper. I almost began to smell inside information, which would, of course, have been in breach of paragraph 10 of the new Civil Service code.

I agree with much that former colleagues of mine have said today but in the time available to me I propose to concentrate on the proposed new Civil Service code and the right of appeal for those who feel aggrieved under it. I can understand why government witnesses to the Treasury and Civil Service Committee of another place argued against a code of ethics or conduct and indeed I do not find all the arguments put forward for it at all convincing. There is, however, one argument which seems to me to have been growing in importance and which has now in my view become decisive. This is the fact—other noble Lords have referred to it—that the Civil Service is becoming less of a unified and homogeneous body with a shared tradition and culture which does not need to be written down and which is absorbed by the new entrant almost by a process of osmosis.

The Civil Service used to be a very centralised body in so far as establishment and personnel matters were concerned. But the whole object and intention of executive agencies is precisely so that everything does not have to be laid down and overseen by the centre. I do not quarrel with that. However, as different agencies start to develop their own cultures and traditions, we cannot rely on homogeneity and osmosis to reinforce the ethic of a non-political, fair-dealing Civil Service, particularly when executive agencies are under pressure to achieve their performance indicators and targets and possibly have temptation at times to cut a few corners to do so. Similarly, the greater degree of recruitment, particularly at senior level, from outside the service, however desirable it may be for other reasons, means, as has already been said, that not all senior officers have grown up in the service; and to me it calls for a more formal definition of what the public service means.

This question of homogeneity seems far more meaningful than any question of so-called politicisation, which has been argued by some people and which I simply do not believe. There are arguments against any party—whichever party it is—remaining in power for too long. It introduces a kind of sloppiness in administration and so on. But that is nothing to do with partisanship. I am absolutely certain that the Civil Service today, just like the Civil Service which I grew up in, would treat a change of party in government as a kind of challenge to be met.

The draft code in the White Paper, based as it is largely on the text prepared by the Treasury and Civil Service Committee, deals with both duties and rights and has much to commend it. In the time available I

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would make only one detailed point about it and one more general and important one. In the White Paper the Government provided a very helpful crib to the changes which they had made to the original Select Committee draft. I was fascinated to note in paragraph 5 that the Government had struck out "fairness" and substituted "impartiality" in a sentence saying how civil servants should conduct themselves, vis-o-vis Ministers, Parliament and the public; along, of course, with integrity and honesty. That is fair enough. But I wonder whether "fairness" should not appear in the following paragraph which concerns how the public expect to be dealt with: sympathetically, efficiently, promptly and without bias or bad administration.

This may sound a detail but no one is value-neutral or completely objective and, in handling the affairs of the public, civil servants must observe due process or neutrality of process in order to ensure that individual cases throughout the country are treated on a similar basis. That is the reason for much of the red tape associated with Civil Service procedures. I hope that the need for neutrality of process, which is not quite the same as an absence of bias, will be reflected in the final draft of the code.

My more important point concerns the right of appeal to the Civil Service Commissioners for civil servants who feel that they are required to act in a way inconsistent with the code and have not had satisfaction through the normal departmental channels. I accept the need for an outside point of appeal and I cannot think of a better one than the Civil Service Commissioners. But how wide should this right of appeal be given? This point was mentioned by the noble Lord, Lord Armstrong.

Paragraph 11 of the Government's draft code offers it not only on matters of legality and ethics but also where a civil servant believes he or she is being required to act in a way,

    "which is otherwise inconsistent with this Code or raises a fundamental issue of conscience".

The words used are "or raises a fundamental issue of conscience", not "and raises a fundamental issue of conscience". Is this really the intention? The code covers a very wide range of activities, not all of which involve issues of legality or conscience. I hope that careful thought will be given to how this right is defined to make it clear that it relates to genuinely improper requirements placed on civil servants and is not an avenue for civil servants whose real grumble is about a Minister's policy or his behaviour. Misuse of this procedure or extending it too widely would not help the Civil Service and could become the shortest cut to politicisation of the Civil Service.

I have an open mind on the desirability of introducing the new code under the prerogative or by legislation. I would have tended to prefer the use of the prerogative so far as the role of the Civil Service Commissioners is concerned, for the reasons given in paragraph 2.15 of the White Paper, and to mark the fact that they stand apart from the normal Whitehall departments. However, the wording of the following paragraph in the White Paper would now seem to imply that the Government will legislate if there is inter-party agreement. That

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wording worries me quite a lot because it implies that if the Government then proceed under the prerogative there has been inter-party disagreement and that would be the worst thing of all for the Civil Service. I very much hope that the consultations which will take place are successful and that there is inter-party agreement on the code.

6.38 p.m.

Lord Greenhill of Harrow: My Lords, I, too, congratulate the noble Lord, Lord Allen, on his opening speech. When he invited me first to call on him in his office in 1969 I knew at once that he was not an ordinary civil servant. He had copies of Private Eye open on his desk.

I hope your Lordships will not think it unreasonable for an elderly retired Diplomatic Service officer to seek some assurance that the proposed reform of the Home Civil Service will not lead to the weakening of the strength of the Diplomatic Service. Some of the projected reforms will doubtless be applicable to both services. But it is important that they do not damage the Diplomatic Service and prejudice the United Kingdom's ability to pursue the objectives of a global foreign policy.

My suspicions were somewhat aroused by the glossy White Paper which has some of the characteristics of a commercial catalogue. The first White Paper issued some months ago made a brief reference to the Diplomatic Service and further details were promised. Such details do not appear in the present document. I hope that a further document is not intended. I know that some significant reforms of the Diplomatic Service are already being considered in the same way as for the Home Civil Service. One example is the consideration of "contracted" senior officers. I question the wisdom of that. Can noble Lords imagine the head of state of a foreign country being impressed by a British ambassador whose contract he knows is coming to an end and who has made only a temporary financial commitment to the service.

As your Lordships know, the form of the present Diplomatic Service is based on an Order in Council which establishes the procedure for recruitment and the terms and conditions of the service. In my opinion that is most important. There is some suggestion that it should be superseded in future by legislation. Would not that legislation destroy inter alia the sense of service which is a very valuable feature at present?

The Home Civil Service, so long admired, is in the process of shedding functions to agencies and is increasingly subordinated to consultants. I had experience of seeing this in action in the Select Committee on the King's Cross Bill. In contrast, the Diplomatic Service faces the problems of additional responsibility as the new pattern of the world requires us to participate in new problems affecting our safety and our economy. We may be helped by the European Union. But the Secretary of State, Douglas Hurd, says rightly that we must control our own national defence. I agree with that and I believe that we should also control our own diplomatic machine.

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Our Diplomatic Service, I know, is under modernisation and internal reform. It is sharing experience with the Home Civil Service. It is greatly helped by its own inspectors who travel worldwide and see for themselves the problems on the spot. The last nine years of my own 30 years' experience were in Whitehall under different governments and contrasting political parties. The new White Paper includes a proposed Civil Service code on pages 43-44. I see little in it which has not been accepted practice in the Diplomatic Service over many, many years.

The working relationship between members of the Diplomatic Service and Ministers has been, in my experience, frank, cordial and loyal. Members have not been self-seeking, deceitful or exercising their own private political views. I can see here several Members on all sides of the House who can give testimony to that. Successive governments were able to rely on their staffs despite the changes. I hope that that state of affairs will continue.

I was myself once considerably nonplussed by a Foreign Secretary's remark and I shall repeat it. It was the late Michael Stewart—Lord Stewart of Fulham. He asked me to explain a complicated disarmament question, which I did. When I had finished he said: "You explained very well the interests of Her Majesty's Government, but tell me", he said, "what are the interests of mankind?" I was completely nonplussed by that.

There is one possible cloud on the horizon to which I was going to refer, but I shall not, in regard to the Scott Report. I hope that it is responsibly dealt with and does not lead to a determined attempt to move the settling of diplomatic affairs to the television screen.

Another point I wish to make concerns the qualifications and abilities of the members of the future Diplomatic Service. It has become fashionable to accuse both the Home Civil Service and the Diplomatic Service of not knowing what goes on in the so-called "real world". My guess is that, as regards the Diplomatic Service, sometimes its members know more than most of what goes on in several real worlds.

For many years the service has seconded individuals to industry and finance, and vice versa, and recruited outside staff with special abilities. But from time to time politicians from both parties have held high diplomatic appointments. Most have been highly successful and welcomed by their staffs. I had personal experience of working with Lords Franks, Harlech, Cromer, and Caradon and the journalist, Mr. Freeman. No doubt such appointments will again be appropriate in certain circumstances and will no doubt include Ladies this time. However, I hope that we shall not follow the methods of the United States in that respect.

No doubt some of the proposed reforms to the Home Civil Service can be followed in the Diplomatic Service. But the Government will be taking a risk if all the present White Paper is fully implemented. In my view, the Diplomatic Service must act in parallel with the

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Home Civil Service but must continue to be independent and separate in order to adapt to future global developments.

6.46 p.m.

Lord Beloff: My Lords, it is recorded that Abraham Lincoln was approached by a delegation who informed him that General Grant was addicted to whisky. His reply was, "If you will be good enough to tell me the brand of whisky, I will send a cask to each of my other generals". In other words, Abraham Lincoln, like great men, was concerned with the outcome. He wanted to know that there would be victories and he credited the general who brought him victories.

The public in general is very remote from the interesting problems that we have been discussing this afternoon about the internal morale of the Civil Service and about the possibilities of appeals if there are matters of conscience. Things of that kind are important and interesting, but the public are concerned about whether Britain is being well governed—that is, has the Civil Service any responsibility, which can be pinpointed, for various things which have happened and which are, to a greater or lesser degree, unwelcome?

In our debate on Monday afternoon it was pointed out how between them the Department for Education and the Treasury managed, from a perfectly sensible idea that people whose education benefited from the public purse might pay back some of it when they achieved larger incomes, to create chaos. In our debate this afternoon it was pointed out how many good intentions by different government departments towards dealing with the problems of children are vitiated by the apparent inability of Whitehall departments to act together satisfactorily. I do not believe that I need rehearse other examples which will be apparent to many noble Lords.

In thanking the noble Lord, Lord Allen of Abbeydale, for introducing this debate, I only regret that he did not emphasise even more strongly the absurdity of the notion that administration or management can usefully be separated from policy. It is like the general who says, "My strategy was splendid, but it was the wretched people on the ground who messed it up with their tactics".

Whether or not we get it right must largely depend on the quality of the civil servants employed. Therefore, my own interest has been—and I echo some of the points made by the noble Baroness, Lady Park—in the recruitment process which, like everything else, has undergone many changes. We now have the Recruitment and Assessment Services Agency which has taken over the role which the Civil Service Commission once enjoyed. I have been looking at its constitution and what attitudes can be derived from the kind of tests which it imposes on would-be applicants. It seems to me that this is an agency which is excessively weak. It is manned, for short periods, by persons from other departments, and we know that that means persons whom other departments believe they can spare. The documents it produces are written in a jargon which betrays all the influence of modern

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managerial newspeak and little of the discipline, intellectual and linguistic, which is presumably to be expected of the people it is trying to recruit.

The agency works, as many noble Lords will know, through panels of three. One is the chair. It was a chairman in the published document about the new system, but it is a chair in its internal documents—a very vigorous piece of furniture which writes, interviews and looks after things in general. The other two are a psychologist and a departmental assessor. It is pointed out that the two, as it were, lay members of the board, although they all have to agree on the report, are not expected to understand the psychologist's contribution, because that is very technical. It is also suggested that the psychologist must try to demystify his or her contribution by explaining to the candidate what it is that he or she is trying to find out.

The agency tries to meet what it claims are demands from the departments that its reports should be better formatted. I do not know exactly what "formatted" means. I suppose that if you can have matted hair you can have formatted reports.

Members of the panels are told that they must not use what is called "familiar language"—clubby terms such as "Wykehamist". I never thought of Wykehamists as very clubby, but no doubt in the recesses of that body Wykehamists are thought to be clubby. It goes on in that way, and I shall not bore your Lordships with further quotations from its grammar or syntax. But the impression that it leaves, combined with other information one has, is of a serious denigration of intellectual qualities in the people being sought, and that is of some importance to noble Lords. It applies of course to the Diplomatic Service, which it also handles, and noble Lords will realise that it is also how our Clerks are being recruited or will be recruited; that is to say, the business of being able to work in a team; to get through a test involving an in-tray and an out-tray; circular discussions among teams—all that modern newspeak—is given preference.

It is said that the intellectual qualities are guaranteed by the fact that everyone who is allowed to proceed to these tests must have a first or second-class degree. If they are so remote from the world that they believe that a 2:2 from the University of Loamshire is a guarantee of high intellectual performance, then those civil servants at any rate are as remote from the real world as it is often thought civil servants in general are.

It is important that we should look, as the Treasury Select Committee did not look, at the general method of recruitment and of what is being looked for. The general public does not mind. They would not mind if all civil servants were Oxbridge, provided they felt that they were getting good government. The accent on being politically correct (gender conscious) and all the types of things which fill these documents and their conversations is something which threatens our future.

6.55 p.m.

Lord Bridges: My Lords, I too am grateful to my noble friend Lord Allen of Abbeydale for selecting this subject for debate and for his excellent introduction. The Civil Service is not exactly a popular topic, and that

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comes as no surprise to former members of the public service who have been taking part in today's discussion. We are well aware that we continue to be grouped in the public mind with mothers-in-law and Wigan Pier as objects of ridicule. I borrow that phrase, which is not mine, from a speech made by a former head of the Civil Service (my father) in his Rede Lecture of 1950 on this very subject.

I should at the beginning declare an interest. I am a member of this breed: for four generations my family has contributed a number of members to the public service. I have some pride in being the great grandson of one of the architects of the Victorian Civil Service who was, for no fewer than 18 years, the Permanent Secretary at the Board of Trade. His name was Thomas Henry Farrer, and he came to this House in his retirement. As a former member of the Diplomatic Service, I do not forget the life of my great uncle, Cecil Spring-Rice, ambassador in Washington in the difficult years of American neutrality between 1914 and 1917 and removed from his post by Lloyd George when he became Prime Minister to make way for a political appointment. With that personal background, your Lordships will understand why I take a particular interest in the Government's policies towards the Civil Service. I suggest that they need to be looked at in a long perspective as well as with close attention to detail.

The creation of a unified public service in this country was one of the notable achievements of the last century. It stands with the other great Victorian reforms such as the creation of a universal education system, the improvements to our system of criminal justice, the Great Reform Bill of 1832, the extension of the franchise, and so on. We should not forget that it was a deliberate move away from the atmosphere of political corruption and jobbery in the 18th century, which was a source of much public disgust. Northcote and Trevelyan have been mentioned, but the person who led the foundation for those reforms was none other than Edmund Burke in a series of important Bills which he steered through the other place from 1780 onwards.

The underlying principles of the Victorian Civil Service—the great reform—are worth reciting. Some of them have been mentioned already. They are important: selection of entrants by a competitive system; the supervision of that system by an independent body; promotion on merit; and political neutrality. In their White Paper, the Government specifically confirm their endorsement of those principles. I am glad. My concern is that some of the individual reforms in the White Paper, and some already introduced, do not fit very well with those principles. I shall explain in a moment my grounds for concern.

Before going into those matters, I should like to mention a few other general considerations; first, the quality of the administrative machine we have inherited from the past. By international standards, that machine is outstanding. It gave us the civil apparatus which enabled us to win two world wars and to manage the great transfer of power which took place in 1945. More recently, in travelling around, I have heard in most European capitals—not just in France, which has been mentioned—admiration of the manner in which the

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Cabinet Office secretariat and the Civil Service generally in London handles the co-ordination of our European policies. The policies are a different matter; it is the way in which they are carefully co-ordinated and prepared that commands admiration. All the other countries wish that they had such a system.

Then there is the issue of political neutrality. I had a ringside seat for two changes of administration. The first was in 1964 as a Private Secretary in the Foreign Office and the second was 10 years later as a Private Secretary at 10 Downing Street. Those are always difficult times. I doubt whether members of incoming administrations appreciate to the full the determination of the Civil Service to work for the incoming government and to give them their wholehearted support. I heard with gratitude and strongly support what was said by the noble Lord, Lord Jenkins of Hillhead. The desire to support a new government is held regardless of the respect or personal liking that civil servants may have had for those leaving office. Political neutrality too, is an asset that we should not lightly throw away. As has been pointed out, it is easy to maintain if there are fairly frequent changes of government and if there is broad national consensus on at least the main policies.

Then there is the issue of cost. Of course there is need for strict financial discipline in Civil Service pay as in other matters. The White Paper states an important assumption on page 9. It says that,

    "pay and price increases should be offset, or more than offset, by efficiencies and other economies with adjustments as necessary for workload".

The last six words are crucial. One may prune any extravagances that one may find and curtail marginal matters. However, beyond that one will have to cut into the main stem if one is to make economies year on year. I am not sure that the present Government understand how difficult it is to do that without reducing workload and function. The creation of Next Steps agencies may have masked the problem temporarily in statistical terms but the problem is still there. Nor can all policies be readily measured by cost benefit analysis, important though that is. There are a number of areas in which that analysis does not help. Foreign policy and defence are two such areas and the principles of Civil Service reform may be another.

Returning to the text of the White Paper, I have two main anxieties. They relate to the process of selection and recruitment and the issue of political neutrality. As regards selection, the crucial point is the way in which candidates for the most senior posts are chosen. It is clearly the intention that most of these posts will be filled by a new procedure after public advertisement. It is not clear exactly how that will be carried out. We are told that the Civil Service Commission will audit the procedure and approve all outside appointments. We are also told that the first commissioner will sit on the senior appointments selection committee.

But some further explanation seems to be required. Who exactly will make these appointments? Will Ministers have a role? What will be the chosen criteria? To whom will the selectors be responsible? Furthermore, who will determine the salary levels? Will they be within published scales or applicable ad hoc to

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attract particular candidates? That appears to have been the procedure used to select the director of the prison service. In order to clarify uncertainty, it would be helpful if the Government could tell us more. Personally, I shall reserve judgment on the reforms until they have done so.

Finally, there is the matter of political neutrality. I can briefly illustrate my worries by the following comments. I read in the press that the Government intend to reduce the senior staff in the Treasury from 24 to eight and that the eight people will be chosen by the new procedure. Let us suppose that that happens. If subsequently there should be a change of government—and I assume that that will eventually occur—what will be the attitude of the incoming administration towards the senior officials? Of course, much will depend on the answers to the questions that I have just posed, but it is extremely important to avoid the situation in which neither group has confidence in the other. Very often, these government changes take place when rapid decisions need to be taken on financial matters. An incoming Chancellor of the Exchequer who lacked confidence in the senior team at the Treasury would surely put into effect policies worked out outside the Treasury. We should do well to recall what happened in the great row about import surcharges in 1964.

I am not a natural ally of Colonel Blimp and I believe in the steady need for reform and innovation. However, I also believe in principles. I hope that the noble Viscount will be able to convince me that the Government will not damage the essential principles of our Civil Service.

7.5 p.m.

Baroness Williams of Crosby: My Lords, this has been an impressive debate, not least the last speech by the noble Lord, Lord Bridges. He raised some extremely important questions which I hope the Minister will answer today or in the near future. I hope that the noble Lord, Lord Allen of Abbeydale, derives pleasure from the fact that on the Benches today are some of his most distinguished colleagues from the public service, and a slew of young Ministers who were once under his guidance are now older Peers and who learnt a great deal from him about the public service. It can be fairly said that the noble Lord, Lord Allen, is the very model of the finest type of public servant. I say that as one who had the great honour of serving with him—not under or over but with—as Minister of State at the Home Office when he was Permanent Under-Secretary in that department.

One of the features of the debate has been an almost elegiac sense of the passing of one of the finest assets that this country has ever had. It is the British Civil Service and the concept of public service that has for so long been associated with it. The noble Lord, Lord Bridges, referred to his ancestor, Cecil Spring-Rice, and I could not help recalling the words of the famous hymn that he wrote:

    "I vow to thee, my country all earthly things above

    Entire and whole and perfect, the service of my love".

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That is perhaps a Victorian way of putting the sentiment of devotion and loyalty by which so many civil servants in this country have been marked; but all of us recognise that something fundamental has changed. I must ask the question that was echoed in many speeches today: why is it that we in this country seem to destroy the very things that we do best and seem to be so reluctant to recognise that they have added greatly to our reputation?

It is difficult to deny that not only we in this country but others live in a time of great disillusionment and cynicism as regards the processes of government and the personalities of those engaged in it. Much of that cynicism is directed at Ministers and politicians, and not primarily at civil servants. We should be living in a world of astonishing complacency if we failed to recognise that several events during the past few years—from the Spycatcher case, which appeared to make the Government look obsessive, through the Matrix Churchill case, which appeared to make Ministers deceptive, to the Pergau Dam case, in which fortunately the beacon behaviour of a particular Permanent Secretary upheld the highest traditions of the civil service—have raised profound questions in the minds of our fellow citizens about the probity, efficiency and honour with which in the broadest sense governance is conducted today.

I wish to comment on a point raised by the noble Lord, Lord Barnett, in a most significant and impressive speech. It is the anxiety felt by many about the use of patronage to appoint people to quangos and executive agencies, and the great uncertainty about the lines of accountability from those quangos and executive agencies to Parliament and the wider public. The noble Lord, Lord Dean of Harptree, referred reasonably to the idea that quangos might have a useful role to perform provided that the highest standards of public conduct are maintained. I could not help asking myself why the chairman of the Welsh Development Agency, so heavily criticised by the Public Accounts Committee, was almost immediately after leaving that position appointed to be a governor of the BBC. It seems a strange way of recognising outstanding public service.

Perhaps I may raise three issues which have been mentioned extensively in the debate, each of which raises some very troubling questions. The first of those is the issue of ministerial accountability. Ministerial accountability to Parliament is the very linchpin of the unwritten British democratic system. Once ministerial accountability ceases to be clear, the whole of our structure begins to become shaky.

I echo the contribution of three other noble Lords in the debate who said that it was extremely troubling that in another place, the Home Secretary, on 10th January, in his reply to the right honourable Member for Berwick, attempted to distinguish between his responsibility for policy matters and his responsibility for operational matters in relation to the issue raised by the noble Lord, Lord Merlyn-Rees—prison escapes.

That is a very dangerous fudge. Ministers are responsible for what goes on in their departments. That has been made clear repeatedly. It is not only troubling

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but it is a slippery slope away from the sense of responsibility which is so crucial to try to make that false distinction between operational and policy areas.

But it is possible to do that just because the creation of executive agencies has raised major ambiguities which remain unresolved. When we discuss, as we do, the issue of a code of conduct for civil servants, it is very important indeed that that code of conduct should reflect the responsibility of heads of executive agencies and deal with some of the particular issues in regard to their relationships with the public and who is responsible for them.

The second area of concern that has been mentioned by a number of noble Lords including the noble Lords, Lord Bridges and Lord Bancroft, affects the issue of appointment by merit—open promotion—which was referred to in the case of the director of the Prison Service. It is troubling when Ministers intervene in appointments, as seems to have occurred on that occasion. That would go a long way towards destroying the trust which is essential between the Civil Service and Ministers and potential Ministers which has been one of the great achievements of our Civil Service.

I have no objection to the idea of open advertisement for certain posts. Indeed, I believe that I was the first Secretary of State ever to appoint a senior official as a result of open advertisement—the appointment of the Director-General of Fair Trading. I see nothing wrong in that reform. But I believe that it must be quite clear who makes the appointments and that many of the questions raised by the noble Lord, Lord Bridges, are crucial questions which deserve a full response.

The third area of concern affects the issue of objectivity and neutrality. Perhaps the noble Lord, Lord Armstrong, will allow me to question that fundamental statement about the role of the Civil Service—what is sometimes called the Armstrong Memorandum, which was the work of the noble Lord, Lord Armstrong of Ilminster. The Armstrong Memorandum has become the basis of much that has been quoted in the White Paper and also in the accompanying paper from the First Division Association and the IPMS. I hope that the noble Lord will forgive me for not warning him that I should be raising this point but as I am winding up the debate, I did not know that I should be referring to it until a few moments ago.

The Armstrong Memorandum states:

    "The Civil Service as such has no constitutional personality or responsibility separate from the duly constituted Government of the day".

I recognise fully the outstanding intellectual abilities of the noble Lord, Lord Armstrong, but I am troubled as to whether it is the case that there is no responsibility other than that to the duly constituted government of the day, whatever they do. I am not referring to the present Government or any other particular government. But at present, we are entering into commitments to international treaties where our signature lies on them; for example, the European Convention on Human Rights. We are committed to upholding the rule of law. I wonder whether that statement deals with the possibility—and heaven knows, we live in a world

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where we have seen it happen!—that the government of the day might go beyond that for which it would be proper to have responsibility.

That is an issue which is raised particularly by the question of misleading Parliament, deceptive statements and any steps which Ministers may take which breach the rules of proper behaviour. We must address those matters, although we may not wish to do so, because we do not live in quite the world of homogeneous values in which we once lived.

I conclude by raising a few questions which I shall address to the noble Viscount. The first of those questions concerns the proposed code of conduct. How will that code of conduct deal with the period between leaving the Civil Service and taking up a job in an area which may be related to one's previous post in the case of those who are on fixed-term, renewable contracts? For example, if the Director-General of the Prison Service were to take up a post as a director of a private security agency, what is the period of time that would be required to elapse between those two positions? That is an extremely important question if we are to retain respect and belief in the probity of our public service.

The second question that I wish to raise is more minor but is not unimportant. Perhaps the noble Viscount will tell the House whether there is any common statistical base among the executive agencies of the Civil Service which will enable the monitoring of discrimination on both gender and racial grounds to be conducted properly because I understand that that is becoming increasingly difficult.

Finally and thirdly, I ask the Minister to give us a fuller statement about the proposal that there should be a right of appeal for civil servants to a body outside their direct senior officer. What is the Government's view about that at present? I apologise by speaking for one minute longer than I should do but I had been told that there was a minute in hand so that I trust that the government Chief Whip will not be too angry with me.

7.17 p.m.

Lord Richard: My Lords, I start by joining in the congratulations offered to the noble Lord, Lord Allen of Abbeydale, for raising an issue which the House has clearly found important. Not only that, it has given rise to what has proved to be an extraordinary debate. There have been 17 speakers in the debate: six former permanent secretaries, three former Cabinet Ministers, two former very senior civil servants and one or two people like myself who, at one stage, was an incorporated civil servant, if that is the right way to put it.

It is interesting that consistent themes have run throughout the debate. With the exception of the noble Lord, Lord Dean of Harptree, nobody has spoken favourably about the Government's attitude. If I had to sum up the whole flavour of the debate in a sentence, it seems to me that there was intense pride in what we had in the form of the Civil Service, great unease as to what is now taking place, and considerable uncertainty as to what the future may bring.

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I believe that that is fair summary of the speeches that we have listened to during the past three hours. If that is right, the noble Lord, Lord Allen of Abbeydale, deserves more than the usual formal congratulations of the House for giving this subject an airing at this particular time. The noble Viscount the Leader of the House who is to reply to the debate has a formidable task before him in answering the queries which have been raised and in reassuring those noble Lords who have spoken.

One point of agreement that has emerged is the crucial importance of the British Civil Service to the proper working of our governance. Since the 1870s, that great national asset has been the permanent and impartial instrument of all administrations, guaranteeing constitutional and financial propriety. I know of no other Civil Service in a comparably-sized country in the world about which one could make such a proud claim with so much historical basis in fact and in accuracy. We must remember that the Civil Service numbers not only those who advise Ministers in Whitehall, but also the remainder—the overwhelming majority of the service of over half-a-million people—from departmental messengers to prison staff, from those who calculate social security benefits to official receivers, and indeed many others.

Our Civil Service has exemplified public administration founded upon principles of public service, impartiality, integrity, accountability and selection and promotion on merit. On behalf of the Labour Party, I am very happy to pay our tribute to the way in which those qualities in public service and public administration have been exemplified in the Civil Service.

When the Minister responds he will, no doubt, say much the same thing and promise that the Government will continue to stand by their principles in their dealings with those who administer the policies that they make. He may do so, but the whole tenor of the debate seemed to have been in the opposite direction. Recently, a group of senior civil servants expressed the following view:

    "Civil servants have felt undervalued and beleaguered; cost-cutting and short-termism has often appeared to displace a rational approach to the improvement of the efficiency and effectiveness of the service".

They concluded with the words, "Current morale is low". Once again, the Government's claims and the real experience of those affected by them do not precisely and entirely coincide.

After 15 years of a single party in government, there are some in the Civil Service who fear that the Civil Service may be perceived as the property of one party by those in charge. I believe that all the other issues only serve to reinforce that threat of loss of independence—the redundancies consequent upon efficiency drives, performance-related pay, the apparent greater politicisation of the higher grades, agency status and contracting out, and the lines now being drawn between the accountability of Ministers and of those under them. It is those matters which have led to what many believe to be an unprecedented loss of morale.

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No one quarrels with the need for increased efficiency—certainly, I do not—but that is an issue where good management skills must be applied. Low morale is in itself a major threat to increased efficiency; there is little point in cutting jobs and thereby saving money if the people who remain feel so threatened and under such pressure that they cannot work as well as they used to. Redundancies, or, perhaps, the threat of them, may make civil servants less willing to give unwelcome advice to their managers or to Ministers. Do we really want a Civil Service where it is those who keep their heads down who are the ones most likely to make progress? I think not.

Nearly 150 years ago, the Northcote-Trevelyan Report produced a blueprint for the modern unified politically impartial Civil Service which we now regard as the norm. The unity of the service was to be fostered by uniform methods of recruitment and systems of promotion across all departments. In 1968, the Fulton Report sought to reinforce that unity through shared methods of recruitment and shared structures for pay and grading. In 1987, the Government set out the advantages of service-wide pay and personnel management arrangements. They said that,

    "staff can move easily between Departments and do any work for which their qualifications and experience suit them; machinery of government changes can be effected quickly and easily; Departments do not compete against each other for the same scarce skills."

Government policy now seems to me to have abandoned that approach and with it many Civil Service pay agreements, some concluded as recently as 1992. Gone, apparently, is the idea of a single employer paying individuals on the same grade and doing the same job—albeit in different departments—the same amount of money. The new thinking seems to be that departments and agencies can pay the "market rate" which may apparently differ now from department to department. The Government's 1987 objections seem to have vanished. Perhaps the noble Viscount the Leader of the House can tell us why there has been such a change over the past six or seven years.

The fragmentation of unified pay structures has been accompanied by the introduction of performance-related pay. The practical experience of performance-related pay—at least, so far as concerns the Civil Service—is that it is both demoralising and ineffective. Many of the functions carried out by civil servants are in their nature difficult if not impossible to measure. Quite apart from that, the pay budgets of departments remain cash limited, so that they cannot afford staff who are performing well above the expected level. Indeed, one hears the rumour of a marked decrease in box markings for the year before performance-related pay was introduced to the year of introduction. It seems that staff are being given the message that their performance has suddenly declined, when in fact it has done nothing of the sort. But, of course, it is much cheaper to do it that way. There is no objective research to show that performance-related pay improves performance. I believe that it is time for the Government to commission an independent study themselves to find out what difference, if any, it has made.

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Finally, the role of the Civil Service is threatened by the drive to contract out as many services as possible—even those which verge on the judicial, such as the traffic commissioner, or those where most would agree it is for the state to take responsibility, such as the administration of justice or the incarceration of offenders. It seems as if almost nothing has been ruled out; not even the Serious Fraud Office, with the extensive powers of search, seizure and interview that that body possesses.

Clear issues of public service, confidentiality and impartiality are raised by contracting out. There are also very serious questions as to whether contracting out really does save any money. Indeed, actual payments often exceed the agreed operating costs. One should not ignore the fact that many companies to which matters are contracted are in business in order to make profits.

I should like to say a few words about agency status. I believe that the dangers involved have been exemplified recently by the numerous problems that we have had in the prison service. We are now told that the Minister with responsibility for prisons is responsible only for policy; the Prison Service Agency is responsible for operation. First, I should add that that is not a distinction that I entirely appreciate. I do not quite see how one can draw such clear lines between that which is a matter of policy and that which is a matter of operation. We are told that all the recent problems have been operational and that, therefore, the Minister does not have to accept criticism. But he can pass it on to the paid officials. That must be wrong.

Ministers cannot hide behind their civil servants; indeed, it would be very wrong if they were to try to do so. That is especially so when those officials are part of an agency. Lines cannot be conveniently drawn between policy and operation. For example, we await the report of Mr. Justice Scott into the arms to Iraq affair and the use of public interest immunity certificates. Ministers must not be allowed to carry out the same exercise in taking refuge behind their advisers. It must be clear: civil servants may advise, but Ministers take ultimate responsibility for what is done and for how it is done. It is a reflection of what has been happening recently that this now has to be said.

We cannot manage in this country without a Civil Service which is trusted by everyone and which feels itself to be valued and trusted by Ministers. We still believe that our Civil Service is among the best in the world. But, I close with the following question. Unless government attitudes change, how much longer will we be able to say that?

7.28 p.m.

The Lord Privy Seal (Viscount Cranborne): My Lords, I can certainly agree with almost everyone who has spoken this afternoon in saying that we have had a most interesting and important debate. I must say that I intervene now with some diffidence for many reasons,

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but mainly because I feel rather as I imagine a novice Freemason must feel when stumbling into the reunion dinner of the inner ring—

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