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The Government have been informed that I proposed at the outset to say something about the Recruitment and Assessment Services. The Chief Whip on the other side was so informed by my noble friend the Chief Whip on this side this morning. I do so in view of the evidence given yesterday by the Minister's right honourable friend Mr. Freeman to the Select Committee set up by this House following the debate on the RAS. It is no doubt much in the mind of the noble Earl, Lord Howe. The Government were roundly defeated. After that defeat the Select Committee was set up. It was agreed that the RAS would be one of the first issues that it should consider. Considerable pressure was put upon Ministers--I am sure that the noble Earl will remember this too--to give an assurance that they would delay a decision on the RAS until after that committee had reported and the House had had a chance to consider the report. Clearly that was the view of the House. But if one reads the words that the noble Earl uttered, there was no commitment to that effect. I accept that; I checked Hansard again today. But clearly that was the impression left, certainly on this side of the House and I suspect on many of those who voted against the Government on that Friday afternoon.
What has happened? Despite the setting up of that Select Committee, the Government have proceeded. In the debate which took place in the other place on 22nd May, a portmanteau resolution on the Civil Service was put down. It was the very last day of the parliamentary Session. Included in that Motion, among a number of other matters, were the words:
I look to the Minister to try to clear the matter up tonight. Are the Government prepared to give the Select Committee's report proper consideration? By "proper consideration", I do not merely mean, "Yes, of course we won't conclude everything in the sense of dotting every 'i' and crossing every 't' until the report has been received". I mean give it proper consideration on the merits of the issue. So far, I see nothing in the Government's statements to show that they are prepared to do that.
I turn to the regulation before us. It is yet one more example of the Government's intense commitment--intensity almost to the point of passion, it seems to me--to a dogma of privatisation which seems to be accepted by no one else. Who is dissatisfied with the present arrangements? Certainly not the consumers. The people who are subject to the Civil Service pension scheme seem to be unanimously against the proposed changes. The reactions of the Council of Civil Service Unions and the Civil Service Pensions Alliance show that they are both vehemently opposed to the order. The truth is that there is no support for the order from civil servants, Civil Service pensioners or deferred Civil Service pensioners. It is not often that I am in the position of praying in aid the words of a former Conservative Prime Minister, but I commend people to read what
Why do I say it is wrong? First, Civil Service morale is low and is getting lower. There is a deep sense of insecurity now felt in Civil Service ranks and the proposal adds to the feeling of insecurity. Civil servants want their Civil Service pensions to be administered by civil servants. There is no reason at all why they should not have it. Secondly, I say that it is wrong because the existing system works well. In another context, one hears a great deal of the American phrase which I do not like: "If it ain't broke, don't fix it". I wish that the Government would take that to heart in this context as firmly as they appear to do in relation to another one.
Is the scheme working properly? It has been examined, there has been an efficiency scrutiny report. What did it say? Paragraph 23 states that the present scheme, because of its size, achieves great economies of scale. Paragraph 24 points out that the PGO's unit costs are currently around £16, which is broadly in line with what the private sector would charge for a large-scale pension paying service. It costs no more than an equivalent private scheme.
The report goes on to state that most large employers with above, say, 1,000 staff run their own employees' scheme and administer it in-house. The pension, consulting and insurance firms manage many schemes for employers but most of these are schemes of less than 1,000 members, a few are between 1,000 and 2,000 members and a small number are larger than that. Where larger schemes are contracted-out--and there is a handful of examples--it tends to be for particular reasons reflecting a strategic decision on the part of management. The report goes on, in paragraph 52, to produce a draft which suggests that above about 20,000 staff, in-house operations are actually cheaper than contracting out.
Finally, paragraph 56 states that it is thought that the efficiency of contracted-out pensions and administration is likely to improve significantly over the next few years as new technology is introduced. That is the current position. It works well and the people affected by it are on the whole remarkably satisfied with it.
Thirdly, the proposal is wrong because there is still confusion as to its scope. The noble Earl put right the confusion that was left by his honourable friend Mr. Willetts in another place, who ended the debate by contradicting what he said at the beginning of it. As I understand it, the order relates to the administration of the Civil Service scheme. Administration covers such activities such as scheme induction, calculation of benefits, answering inquiries, maintenance of personnel data, processing applications to buy added years or pay additional voluntary contributions and paying pensions. So let there be no doubt about it, the Minister has confirmed tonight--and I am grateful for it--that the Paymaster is included within the scope of the order.
The only thing that still causes me confusion is a Written Answer given by the Minister's right honourable friend Mr. Freeman in another place on 25th March 1996. He was asked by Mr. Peter Luff whether, when he expected to make the order, he would make a Statement. Mr. Freeman said:
Doing the best I can, for the life of me I cannot see the purpose of the proposal. It seems to me to fly in the face of logic, administrative good practice, good man management and the wishes of the people who are most affected by it--namely, the pensioners. Why on earth are the Government doing it?
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